I do dumb stuff sometimes!
And so do you. Even when there are better alternatives available. It’s a weird, irrational and deeply human behavior that I think we need to study more.Studying “the dumb stuff that people do” is what got Richard Thaler a Nobel Prize last year according to his own description in an interview. He did call it ”actions inconsistent with the economist model of rational choice” in his academic work, but it is still basically that: Gathering insights on what people predictably do, regardless of if it makes rational sense. Or simply; Rules for predicting dumb stuff. Let me give you some examples of the counter intuitive ways people behave.
Every day, millions of people with life-threatening disease fail to take their pills. This is called non-adherence and costs society enormous amounts every year, in addition to human tragedies. We need to do something about this, and while behavior tweaking might not be the whole solution it sure is a part of it.
In lab tests, people are prepared to pay roughly twice as much for coffee in a beautiful ceramic cup compared to one served in ugly Styrofoam. The same coffee! That might feel obvious, but consider what it means: Value is perceived, not absolute. We live in a world created by our impressions. This means “reality” can be improved and value created from experiences, not only functional delivery.
Today, or at least this week, someone somewhere will play a perfect round of golf practicing with friends, only to lose the game on Saturday while really, really trying to get it right for the club trophy. Studies show that large rewards, be it hefty bonuses or social recognition (=fame), increase activity but not results. Yes, also in banking :)
And then there’s the "paradox of choice” which states that most people say they prefer a wide set of available alternatives, e.g. brands on a supermarket shelf, but feel less satisfaction when choosing and increasingly avoid making choices at all as the range of alternatives increase, i.e. they buy less.
Apart from the entertainment value why is this interesting in the context of Customer Journey Management and CX? Well, managing the irrational behavior of users and customers is often a major source of potential performance increase in many service delivery situations. We tend to focus on the idea of getting people to do more, to stimulate quantity of action. But it is usually better to strive for behavior quality, i.e. getting people to do the right thing, or sometimes to do the thing right.
I’m not a psychologist but I see all these cases from our business around the world and there are certain patterns to them that can be exploited for the benefit of both organizations and their customers. A theme that keeps popping up are the proven design principles of ”don’t make me think” and ”less is more”. It is by limiting or rearranging the available choice architecture that we can achieve what Richard Thaler calls a ”nudge” in the book with the same name. A nudge is any reconfiguration of the context that make people behave or feel in a certain way, while still allowing them the freedom to choose. Many times, the execution of brilliant solutions for Customer Journey Management hinges on the simplification of the situation from the user’s standpoint. This is not always easier for the organization, but the effect and efficiency are usually worth it. And it is an expression of true customer focus!
To start working with nudges and behavior it is important to respect the fact that many behaviors are truly irrational. That means you have to study actual behavior to gain insights. You can’t simply reason your way to the truth, and you can’t ask people to self-explain (as they will just give you a made-up rationalization in the survey). Instead, searching for patterns in real behavior data off- and online, doing A/B-testing and experimentation is the way forward, reducing and refining as you go.
Have you nudged your way to better customer journeys? I’d love to hear about it.