We struggle with choices. Some say it is good to have options but in several instances, we have so many choices that many among us postpone, avoid or even delegate decision-making.
This struggle is costly to the consumers and the businesses. “50% of consumers spend 75% or more of their total shopping time conducting online research…as the current state of online and mobile shopping yields a time-consuming, inefficient experience.”Things do not get better after purchase either. Buyer’s remorse creates negative emotions at the post-purchase stage – a poor way to complete the customer journey, risking customer retention.
Behavioral research offers a tactical solution. Based on the concept of emotional closure, customers who make the physical act of ‘closing off a choice’ report satisfaction. For example, it would be better to make customers close and return a menu booklet than to have them leave menu cards on the table. The human being’s thinking activities operate pretty well on an “out of sight, out of mind” basis.
The tactical solution benefits user experience but it does not steer the decision-making process, especially in big purchases or those of long-term consequences e.g. insurance contracts.
Motivational psychology research offers a fundamental solution. Given that intrinsic motivations are recurrent and generally stable in nature, businesses can not only help customers make decisions by recommending products and services which are in sync with their intrinsic motivations, but also can predict their future behavior and customer lifecycle. American psychologist, Steven Reiss, outlined 16 universal motivations which are empirically validated across more than 60,000 individuals over 4 continents – Asia, Australia, North America and Europe.
This intrinsic solution may well be one of the critical keys to overcome the respect issues customers report to have with financial services. A Harvard Business Review article commissioned an annual Customer Quotient study to measure “how people feel about companies and the experiences they provide”. In particular, it investigated how much people feel they are respected and understood by the companies. Although two firms from the financial services industry were listed among the top 20 companies customers feel most respected by, financial services ranked low on the list of industries.
By uncovering customers’ intrinsic and personal traits, the insights would benefit businesses which apply the understanding to help customers trust them and feel understood. Customers may not be able to articulate the exact form of the product they want but they can express their personal values. These values drive the intention behind the behaviour, consciously or unconsciously.
When customers’ intrinsic preferences and personal traits are actively utilised, three dominant benefits are apparent. The conversion rate increases as customers feel more confident about their choice. This confidence about own choice is important especially on self-directed journeys. Sales efficiency increases as time spent on ‘window shopping’ reduces significantly. Customer value increases – sticky relationships develop over time as the business ‘gets’ the customer.
Businesses today invest in data mining tools to obtain customer insights – but it is not certain if the impact has predictive validity and reliability over the customer lifetime. Such insights are really based on observed behaviour in the context pre-set by the firm’s business and operating model. The insights offer no ‘what-if’ scenarios and even if these scenarios are simulated, their relevance is not engineered to tap on what truly matters to the individual customer.
How then can businesses uncover their customers’ intrinsic motivations? As with many instances in life, the best way is to ask. Ask the customers the right questions. Ask them to engage them. Ask them to give them back value. However as with many instances in life, the fear to ask looms over businesses.