Uncategorized Toggle

The Psychology of the Customer

THE PSYCHOLOGY OF THE CUSTOMER

In a previous post, I spoke about what the product manager needs to be psychologically aware to get the best from the other people in your company and from the business partnerships you may have. In this post, I’d like to explore the psychological aspect of understanding your customers and end users.

The marketing concept holds that the key to achieving organisational goals consists of determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. But how do you know what the customer wants? How do you find out? And even when you “know”, then how do you deliver that in such a way that it is received in the way you intend? And how do you stop users getting bored? How do you know how much they are willing to pay? These questions all hinge on being able to disect the psychology of the customer. Product people need to think about the following questions:

What is the Customer able to tell you?

  • How can you reach potential customers? (hint: Use empathy to tell you whom a potential customer is rather than personas)
  • How can you get honest feedback in Customer Interviews (obviously from customers who really are your customers, see above)?

How does the Customer make a Decision?

  • How can a customer be persuaded (or be free from anxiety) about pulling the trigger?
  • What goes through a customers mind when making a decision?
  • When can a product’s characteristics influence the business model or monetisation strategy that you choose?

What drives Customer Participation (Engagement)?

  • What makes customers stick around?
  • What makes customers drop off?
  • What motivates customers to share or recommend to friends?
  • What is the role of the unexpected in driving participation?
  • What is a community and how do we create those?

 

What can the Customer tell you?

Beware of Personas

There is a general wisdom that a good product person or designer never designs a product until they know who they are designed it for. This makes sense. An alarm clock that you design for a blind person is very different from one for a teenage girl. The secret to success is not guaranteed by spending an hour creating personas and designing for those. Bad personas are worse than no personas. Instead the real question is what is the determinant to exchange, that dimension on which the customer decides to purchase. Clayton Christensen’s Jobs-To-Be-Done framework can be very helpful here.

Politeness is your Enemy

It’s strange to read when it is written like that, but it is true for anyone building product that getting real honest feedback is not an easy thing to do. This is even more true if you are pitching a conceptual idea to someone. You approach someone to tell them you have been working hard for months on something and ask them what they think and even if that person thinks the idea is terrible, they are not going to want to make you feel bad about yourself. They are watching out for your feelings when what you really want from the exchange is to know if you are wasting months of your time. There are clever strategies for separating out the truth from the politeness and some great books on the subject such as the Mom Test and the Lean UX book.

How does the customer make a decision?

Give It Away Now

Of the main influencing factors that help to persuade a customer to try your product, the concepts of reciprocity, social proof and consensus perhaps stand out the most. Robert B. Cialdini’s book “Influence and the Power of Persuasion” is a great starting point to dive deeper into these concepts. I see more and more products giving away huge value for free these days and it is a great question to ask yourself – what (more) can I give away for free that has huge value? This taps into the genetic disposition we have to return favours that are given to us and a powerful driver to encourage customer decision-making. We also know that if a celebrity recommends something or an industry expert, then we trust it more. This is social proof. Also, remember the power of the herd – if you have a huge list of clients, displaying those logos on your website makes other customers feel more secure.

Trust Me, I’m a Doctor

You are sitting watching TV when a fireman bursts in and tells you that a nearby gas leak means you have to leave your house immediately. I’m guessing most of us would just obey this command. But does wearing a fireman’s uniform mean for sure this person is a legitimate fireman? Maybe not, but we have been raised to respect authority. This is where being certified by the right body or partnering with the expert can be a huge help.

You might Miss Out

As individual purchasers making decisions, we have a long list of biases that we bring to the table.  It’s worthy of a blog post in itself, but the one that always strikes me as most important for marketing to customers is that the fear of loss looms larger than the benefit of gains. Another way of putting this is that we hate to lose £5 more than we enjoy winning £5. If a customer sees an amazing offer with a deadline for expiry, the thoughts running through their head is literally “I don’t want to miss out” and explains why you see so many offers that are ending soon. It works. This also explains why the freemium model is so effective. The risk of losing money for a product we didn’t use is negated. In a sense, we only pay after we hit a certain threshold, which is something we are far more comfortable with.

What drives Customer Participation?

I can definitely recommend Hooked by Nir Eyal and a talk by Kathy Sierra on how participation and engagement can be baked into a product. I have also written a lot in the past about what makes communities happen and take off. I also had a long discussion with a client of mine recently who wasn’t sure when I asked him how many people would click on a ‘Share to Facebook’ button on a product we were building. When I asked him if he would click on it, he said ‘probably not’. The point is that there are certain things that we like to share because of the emotional response we get from others when we share them. Virality can take several forms, from the Dropbox model of reward to the sharing of events that users are proud of.

 

Summary

All of the elements we have discussed above are parts of the product and not separate from it. By taking a holistic view and being aware of the drivers that can inspire decisions, we can build in success right from the start.

 

 

 

About the author

Patrick Patrick O’Malley is an Internet and web professional passionate about building products that people love.

Now a product based consultant, he is ex-Head of Product, Yahoo! Answers, ex-Head of Operations MoveMe and an Imperial MBA.

Based in Paris (a bit) and London (a bit).

You can follow him on and Twitter or check his bio

Leave a Reply