Retail

The three fundamental truths about your customers

Bri Williams /

This blog will only be of interest if you’ve ever experienced someone:

  • refusing to change their mind despite evidence to the contrary;
  • being blind to their faults; or
  • making decisions differently depending on what day you catch them on.

That’s all of us, right?

Influencing the behaviour of your customer starts by recognising they are not a blank slate, eagerly awaiting your brilliance. In my experience, there are three truths about where they are coming from, and this shapes how to best approach them. If you want an insight into how I use these truths to structure proposals, presentations and websites, read on.

1. Your customer is the scriptwriter

Whatever you tell your customer will be slotted into an existing narrative about the world.  It’s like you are trying to introduce a new storyline into an existing TV series they have scripted with established characters and plot points.

Known as the “Narrative Fallacy”, people tend to bind facts or events together even where no causal relationship exists. If you listen to one of hundreds of podcasts on how an entrepreneur has found success you’ll hear such narratives play out. In share trading, people tend to believe past performance will help them predict future performance, ignoring the role of luck and uncontrollable events.

It means your customer will have a view of how the world works, and will treat your perspective as something that either fits or doesn’t fit.  As a result, they are prone to:

  • proactively seek information that confirms rather than disaffirms their view (confirmation bias); and
  • reactively distort information to retain equilibrium (resolving cognitive dissonance).

A potent illustration of this comes in the form of a survey of 174 business executives.  When asked to describe their decision-making style, 42% said they were data-driven and 17% said they were empirical. Only 10% claimed to be intuitive.

When subsequently asked how they would proceed if data contradicted their gut feeling, 57% said they would have it reanalysed and 30% said they would collect more data. Only 10% said they would follow the course of action suggested by the data.

In other words, almost nine out of 10 of decision-makers, the majority of which believe they are data-driven, ignore or refute data that does not fit with their narrative!

Steps you should take

  1. Understand their story. What assumptions are they making about their industry or customers?
  2. To encourage them to be open to considering new perspectives, you must first uncover reasons why the existing narrative is flawed. This is your grounds to provoke new thinking.
  3. Start re-writing the narrative and encourage them to agree the status quo is not perfect.
  4. Introduce your new storyline in a form that is easy to integrate into their perspective.

Example

Before I can convince people to consider using behavioural economics, I must first convince them to agree that there are flaws in how we currently think people behave. My training sessions deliberately start with a consideration of why we can’t rely on what people say they’ll do or assume they are rational. Only once we’ve agreed that these problems exist can I introduce a way to resolve the challenge.

And for bonus points, did you notice how I introduced this blog? I started with shared frustration to incite curiosity.

2. Your customer is the hero of their own story

Not only does your customer write the story, they make themselves the hero. Avoid diminishing or insulting their sense of uniqueness, and always approach the situation from a ‘what’s in it for me?’ (WIIFM?) perspective.

Being the hero means your customer will rationalise and justify their beliefs and actions. They will be prone to:

  • acting differently depending on whether they are addressed personally (identify bias);
  • excusing their own poor behaviour if they are otherwise ‘good’ (self-licensing); and
  • internalising credit for their own success, but blaming the external situation for any missteps, while attributing reasons for the success and failure of others in the opposite direction (fundamental attribution error).

Steps you should take

  1. Treat them as a person, not a process, and ensure everything you do considers their WIIFM? perspective.
  2. Presentations — proposals or seminars — will tank if you start by talking about yourself. They don’t care about you yet, so lead with insights about them or their industry before introducing what you have to offer later.
  3. Spell their name correctly!

Examples

  • The first 75% of my proposals are all about the customer — or more specifically, their situation and how it can be resolved. I only include details about my credentials at the end, by which time they are curious.
  • When asking your customer to do something (for example, sign up to a newsletter), tell them what they get (free news) before what they have to give (their email).
  • Your website needs to be about them, not you. Your history and philosophy should be deprioritised  (in other words, not on the home page). Rest assured, if your customer is interested, they’ll find it.

3. Your customer runs on batteries

Emotional and cognitive energy is limited.  That means your customer will follow the path of least resistance wherever possible and is prone to making superficial expedient decisions. That means ‘good enough’ (or ‘satisficing’) rather than ‘maximising’ decisions.

You will have seen the implications of limited battery-power in your friendly neighbourhood supermarket.  There’s a reason they sell sweets at the checkout: people are prone to indulge once their self-control is depleted.

In a study by Shiv and Fedorikhin (1999), for example, a group of participants were required to remember a two-digit number before being asked to venture down the hallway for an interview. On the way, and seemingly as an afterthought, they were offered their choice of fruit salad or chocolate cake from a snack cart. People chose fruit and cake in almost equal measure.

A second group were required to remember a seven-digit number. This time people overwhelmingly chose the chocolate cake. Why? The longer number had chewed up their battery, leaving them to the mercy of their indulgent impulses.

Being battery-powered means customers will be prone to:

  • leave things as they are when they are fatigued (ego depletion);
  • rely more heavily on fast, intuitive, habitual System One thinking when tired, than slow, deliberate, detail-oriented System Two; and
  • follow recommendations if they trust the person making it.

Steps you should take

What state of energy do you want your customer in?

High energy can mean your customer will be open to thinking more about what you are suggesting, but that can also invite pointed objections.

Low energy can mean a more passive audience, which can be good or bad depending on their mood. A passive, negatively disposed customer will not be bothered to contemplate change unless it is the easiest path to follow. A passive, positively inclined customer will tend to roll with your suggestions.

Examples

  • I send my newsletter to most people in the morning so they are fresh and interested in new ideas.
  • I believe my Friday coaching sessions are more popular than Mondays for two reasons: Mondays often have a condensed, business-as-usual vibe where people are just getting back in to what they need to get accomplished; Fridays are typically more expansive, where people like to talk about interesting concepts.

NOW READ: When launching a new product, don’t fight consumer habits

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Bri Williams

Bri Williams is Australia's foremost authority on behavioural economics applied to everyday business and personal effectiveness. Author, speaker and leading consultant, Bri can make your life easier through behavioural science. More at www.briwilliams.com.au.

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