All Customers Are Irrational: Understanding What They Think, What They Feel, and What Keeps Them Coming Back

by William J. CUSICK

Overview

As many businesses are discovering, customer behavior doesn’t always make sense. That really shouldn’t be surprising. As recent studies have shown, people tend to base their decisions on more subconscious, emotional desires than on rational, practical choices. What’s more, customers aren’t able to tell you accurately why they do what they do. Combining recent research findings with real-world examples from his consulting practice on customer experience, William J. Cusick examines how the sub­con­scious part of the brain drives the decisions and behavior of every customer on a daily basis and introduces the concept of "the irrational customer." All Customers Are Irrational shows why businesses must change their approach to attracting and retaining customers, and proposes ways they can alter their strategies on everything from customer research, product design and website development to call center management, employee recruitment, and retail store layouts, by focusing on what customers are actually doing instead of what they’re saying. Honest, direct and insightful, All Customers Are Irrational will help businesses tap into the impulses and motivations that both attract and retain consumers for the long haul.

Product Details

ISBN-13:	9780814414224
Publisher:	AMACOM
Publication date:	07/15/2009
Sold by:	HarperCollins Publishing
Format:	eBook
Pages:	240
File size:	592 KB

About the Author

William J. Cusick (Oak Park, IL) is CEO and Founder of Vox, Inc., a successful customer experience consulting firm in Chicago. He has worked with many Fortune 500 companies, including Allstate Insurance, Zurich North America, CNA, and AIG.

Read an Excerpt

Introduction

First, let me clear something up. We’ve all seen what we think are truly irrational customers. It’s the guy at the front of the line at the fast food joint yelling at the teenager working the counter because he asked for no onions on his sandwich. Or the woman in the shoe store screaming at a wincing salesperson simply because the size she needs is not in stock.

That’s not what we’re talking about in this book.

While stories about crazy, zany customers are entertaining, they don’t make for a particularly useful business book. They don’t tell you how you can improve your own business. Instead, we’re discussing all customers, including you and me, and how we all think about and act in the world around us. What we’ve learned over the last few years is that we are all, in fact, irrational. And irrational isn’t all that bad. In fact, it could be the key to a better business for you.

Based on a wealth of research and some surprising new insights into how our brains work (and how they don’t work) a it’s now clear that companies have been approaching customer ser vice and retention the wrong way. Those who understand this and embrace new methods of attracting and keeping customers have an opportunity to create a game-changing customer relationship, one that could have an exponential impact on their profits.

While companies have traditionally taken a logical approach to gathering information about their customers, and have made “logical” assumptions about what their customers want and how they might act—and then have tried to fulfill those customer expectations—the reality is that customers don’t really know what they want, and cannot predict (or tell you) what they will do anyway.

I’m a business person (I have a law degree too, but don’t hold it against me). I help companies become more profitable. I do this by “showing them the light” regarding the value of their customer relationships and customer experience. For the last twenty-three years I’ve been involved, in some capacity, in customer experience issues, and through that experience I’ve seen the good, the bad, and the ugly in terms of how companies attract and manage their customers. One thing I’ve found is that, what many companies see as “best practice” regarding customer research, product design, service, and processes was more the result of custom or perhaps even ignorance, than insight. And that led me to move beyond the traditional business disciplines to more fundamental questions about how the brain works.

So in this book we’ll look at recent research, and we’ll delve into neuroscience and behavioral psychology. But, unlike some of the brilliant authors in this area of inquiry, such as Dan Ariely, Daniel Dennett, and Timothy Wilson, who are much smarter about these things, we’re not going to focus on simply the idea of an irrational subconscious, or how we really absorb and process information. It’s interesting stuff, to be sure, and I’m fascinated by it. But my concern is how these findings relate to your business generally and to your customer behavior specifically. How do you take this new information about how your customers think and transform your business research, products, services, and processes to maximize desired customer behavior?

There was a hot dog place in my hometown called Little Louie’s. I’d stop there as I was biking home, sweaty and sluggish, from my summer job as a caddy at a local country club. Little Louie’s sat, slouched really, next to the village green in the center of our suburban town, just north of Chicago. To grab a shake or a hot dog, you would open the squeaky wooden screen door and stand in the un-air-conditioned heat of the claustrophobic storefront. Little Louie’s was always crowded, hot, and noisy. A group of anxious customers, jockeying for position in front of an old wooden counter, faced forward with mouths open and eyebrows up, trying to catch the attention of either Ed, one of the founders, or Louie himself. There was no line, but more of a mosh pit; it was up to you as the customer to compete with others to get noticed.

The walls were hidden under dozens of paper plates, each listing a scrawled, faded menu item–some still available, some not. Tacked among the paper plates were assorted autographed black-and-white photos of unknown vintage, many showing older Chicago sports figures like former Blackhawks, Cubs, and Bears, smiling with Ed or Louie.

“You!” The shout was always shocking. If you weren’t paying attention, you could get passed over in a micro-second when Louie yelled and pointed at your gape-jawed, confused, 14-year-old carcass.

“Hot dog, no peppers, and a chocolate shake,” I’d mumble.

“Speak up!” he’d scream over the din. I’d repeat, louder, a nervous adolescent squeak in my voice. Occasionally, you’d hear a first-timer, usually a guy in a suit, ask for ketchup on his dog, and the customers would all shut up and stare, waiting. “Ketchup?” Louie would start. “What are you talking about? You don’t put ketchup on a hot dog!” (Hint: When in the Chicago area, you traditionally don’t put ketchup on a hot dog. Yellow mustard, a kind of neon green relish, and sweet and/or hot peppers, maybe some sauerkraut, though that’s more for a Polish, but not ketchup.)

Banging out the screen door toward the shade of the park across the street, sipping on my shake in its misbranded cup (Louie’s never printed its own cups; they just bought overruns), grasping the crumbled plain brown bag with the dark grease stain spreading along the bottom (from the fries dumped inside, which you didn’t order, you just got), I was a happy camper. a loved that place, and so did a bunch of other folks. (In fact, there’s even a Facebook group sharing memories of experiences at Little Louie’s.) But why? Nothing about the experience I’ve described was in line with any traditional guidelines around a quality customer experience. They weren’t particularly nice to their customers, they didn’t appropriately brand their business, the food was a commodity. But there was something deeper, more emotional at work—something that’s hard to put your finger on.

Compare that to another restaurant in Chicago my wife and I went to recently for a special anniversary dinner (I won’t mention the name). The price of an entrée ran about twenty or thirty times the cost of a meal at Little Louie’s. Chairs were held out in synchronized fashion for us as we sat down. The food was meticulous, strange, and delicious. Every time I took a sip of water out of my crystal goblet (we’d requested simple still water), two waitstaff would step forward from either side of the table, mirrors of each other, and formally fill our glasses from exotic-looking bottles. I pictured the waiters disappearing into the kitchen and walking over to an industrial sink to refill the bottles out of the faucet. For many friends, this restaurant, food, and service were the ultimate. Why was that? What is it that customers are really responding to? Did the water, sipped from expensive stemware, taste better than back home in your kitchen? Is it the product, the level of service? Certainly that’s much of what keeps us all coming back to certain businesses. But there’s more, and it has to do with how we think, and the power of our “irrational subconscious.”

The truth is, we don’t think the way we think we think. The prevailing wisdom had it that the subconscious handled some of our more primal processing, with just our most basic motives and fears lurking in the “subconscious, irrational” shadows, only to be accessed through various forms of psychotherapy. On the contrary, more recent research and studies show that the lion’s share of our more sophisticated thinking and reasoning occurs at that deeper, so-called irrational subconscious level than previously assumed. Among other findings, research has shown that what we thought were conscious decisions and actions are, in fact, processed in the subconscious, with the small (5 percent) conscious portion of our brains often being notified after the decision has been made. Given that, the reasons we act the way we do are much less clear than some might assume. It can even be opaque to us.

The stakes in this effort have never been higher for you. A better understanding of how your irrational customers think can help you reshape how you do business regarding customer acquisition and retention. Every customer you keep has a powerful impact on your bottom line: Retaining a customer typically costs as little as one-tenth or less of the cost to acquire a customer. That translates into a significantly higher profit. Further, there is the surprising cumulative positive effect of keeping more of your customers. By bumping your retention up just slightly, you create a “compounding interest” for growing your customer base. In short, by increasing retention, you significantly reduce your marketing and sales costs while dramatically increasing overall profitability. Isn’t it, then, worth the effort to better understand exactly how your customers perceive the world, process information, and behave?

Achieving that “irrational” connection with customers is the key to business success, and the answers lie within this fantastic puzzle box of our subconscious. And that’s what this book is about.

'

Excerpted from ALL CUSTOMERS ARE IRRATIONAL by William J. Cusick. Copyright © 2009 by William J. Cusick. Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission. All rights reserved. http://www.amacombooks.org.

Table of Contents

Introduction 1

Part I A New World: The Economics and Mechanics of Irrational Customers 7

Chapter I The Bottom Line: Why Customer Experience Really Matters 9

It's Comcastic! How Times Have Changed 10

Are Companies Getting the Hint? 12

A New Dynamic: Customers Bite Back 13

The Stunning Economics of Customer Retention 14

"Thank You, Sir. May I Have Another?" 15

Can You Hear Me Now? 17

Ammunition for an Increased Focus on Customer Experience...in a Marketing World 18

"Real Growth": Tougher Than You Think 21

The Beauty of Compound Interest in Customer Retention 23

Customer Profit: Marginally Speaking 26

Chapter 2 Your Irrational Customers: A Look at How Our Brains Work (and Don't Work) 29

Irrational, But Not Crazy 30

We Don't Think the Way We Think We Think 31

This Is Your Brain, by Homer 32

Irrational About More Than Donuts 34

The Best Way to Make a Decision: Sleep on It 35

The Power of Our Subconscious: Irrational-to-Emotional-to-Intelligent 36

It's Evolutionary 38

Let Me Introduce You to Your Quirky, Unpredictable, Irrational Customers 39

Customers Act Before They Consciously Make a Choice 39

Customers Lie to Themselves 40

Customers Can't Predict How They're Going to Act in the Future 40

Customer Behavior Can Be Influenced by Almost Anything 41

Customers Think in Metaphors 41

Customers Apply Human Characteristics to Inanimate Objects 42

Customers Want Products with Every Feature, But Then Don't Use Most of Them 42

Customers Tell Themselves Stories 43

Are You Up to the Challenge? 43

Part II A Fresh Approach: Strategies and Tactics for Keeping Your Irrational Customers 45

Chapter 3 BrandPromises: Who or What Are You, Metaphorically Speaking? 47

Picture This: Using Metaphors 48

What's Your Brand Promise? 52

Starting at Square One 55

So...What Are You? 56

The Man in the Suit, or the Guy Next Door? 57

Be Careful What You Promise-Expectations Are Everything 58

Expectations Determine Customer Satisfaction 59

Finding "the Nugget" 62

Drafting Your Brand Promise 63

So...What Do I Do Now? 64

Chapter 4 Customer Research: Just What Are Your Customers Thinking? 67

Trending Toward Uncertainty 69

Three Reasons It's Dangerous to Rely on Surveys to Measure Satisfaction 70

Dissatisfied Customers Don't Speak Up 71

Customers Won't Tell You the Truth 74

Even if Customers Want to Tell You the Truth, They Can't, Because They're Irrational 75

Predicting the Future, with Your Eyes Closed 78

Behavior Is Truth 79

Look at the Numbers; They Don't Lie 79

Watch and Listen 80

To Really Understand, Walk in Your Customer's Shoes 82

Don't Ask "How Do You Feel?" Ask "What Did You Do?" 83

"Standardized" Doesn't Necessarily Mean Effective 84

So ... What Do I Do Now? 85

Chapter 5 Prime Time: How Framing and Context Shape a Customer's Experience 87

Priming: A Simple Nudge Will Do 88

The Intended and Unintended Influences of Priming 89

The Business Implications of Priming 91

The Environmental Effects of Priming on Customers 93

Priming and Framing 94

The Impact of Context in Customer Decision Making and How to Use It in Your Business 96

It All Matters 98

So... What Do I Do Now? 99

Chapter 6 Irrational Ain't Stupid: The Emotional Component of High-End Purchases 101

The Power of the Hunch 102

Customers Do Their Due Diligence, Then Go with Their Gut 103

How Intuition Can Trump Logic 104

Thinking It to Death 105

"He Seems Like a Perfect Fit ... but No Thanks" 106

No Matter the Product, Sell the Emotion 108

Analysis Paralysis: Why More Information Doesn't Necessarily Help Your Customers Make a Decision 109

Buyers Lie 112

So ... What Do I Do Now? 115

Chapter 7 A Web of Issues: Online Users Know What They Like, but They Can't Tell You 117

The Web Channel: "Virtually" Priceless 118

"I Owe It All to My Computer" 118

Feel the Love: Build Emotion and Connection Through Your Website 120

Doing, Not Just Reading 123

"Oh, Behave!" 124

Hammers, Saws, JavaScript, and Applets: Building Your Site 126

Determine the Brand and Company Goals 127

Create the Architecture Before Designing a Site 128

Test, Test, Then Test 129

When You're Done, You're Not Done: Incremental Improvement Based on Behavior 132

So ... What Do I Do Now? 133

Chapter 8 Phoning It In: Transform Your Phone Interactions into Powerful Moments of Truth 135

We've All Got Needs: Maslow and Call Centers 136

Create an Emotionally Memorable Interaction 139

An Ear and a Shoulder... 139

...Versus a Chore 140

Expense or Asset? Designing an Irrationally Positive Call Center Experience 142

Don't Push Efficiency at the Expense of Emotion 143

Efficiency... 144

...Versus Emotion 145

"Is There Anybody Out There?" Why Automated Systems Are Not Helping 146

Online Chat: The New "Call Center" 147

Spinning a Yarn: Reinforce Your Customer's "Life Story" 150

The Most Important Employee: The Receptionist? 152

Listen, Listen, Listen 152

So...What Do I Do Now? 153

Chapter 9 Form or Function: The Power of Emotional Design 157

Design with a Drinking Problem 157

Just What Is "Design"? 159

Design That Touches the Human in All of Us 160

The Power of Anthropomorphic Design 160

The Human Bias of the Irrational Subconscious 161

Irrational Design Is More Effective Design 162

Patterns and Your Irrational Subconscious 164

Testing Your Designs: It's Still About Behavior 165

They Want It All...Until They Don't 167

So ... What Do I Do Now? 169

Chapter 10 Irrational Employees: Hire for Emotion; Train for Skills 173

Finding the Right People 174

Hiring for Emotion 175

Weigh Employees on an Emotional Intelligence Scale 177

It's Not "How Do They Think?" It's "How Do They Act?" 177

Past Behavior Equals Future Behavior 178

The Interview: Focus on Behavior 179

Test for Behavior 180

The Final Test: Ask Them to Quit! 182

Employee Engagement 183

An Employment "Containment" Strategy 184

Emotional Engagement as a Business Strategy 185

Walk in the Employee's Shoes 186

The Other Benefit of Understanding Your Frontline Employees: A Better Customer Experience 187

So...What Do I Do Now? 188

Chapter 11 Process This: Tying It All Together 191

Why Process Is Important 192

The Unintended Impact of Inadvertent Processes 193

The Danger of Too Little Process... 194

... Or Too Much 195

Good Intentions Do Not Equal Good Process 195

The Danger of Groupthink: Process for Process's Sake 197

Developing a Customer Experience Process Map 199

Using Technology and Process for a More Human Customer Experience 201

The Process to Keep Every New Customer: Onboarding 203

The Key to Irrational Customer Processes: Empowerment 204

So...What Do I Do Now? 205

Chapter 12 Getting Started: Three Action Steps You Need to Take First 207

Step One Create a Customer Experience Scorecard: Understand Your Numbers 208

Step Two Conduct a Customer Experience Audit: Discover the Customer's Perspective 211

Step Three Start Small: The Secret Is Incremental Improvement 214

Notes 219

Index 223

About the Author 229

Editorial Reviews

The upbeat tone and detailed examples of companies that get it right…lend much-needed verve to an overworked subject.” — Publishers Weekly

“

Read the customer experience transformational book…Your customers will be happier and your business will become much more successful.”  — Blog Business World

“…cogent analyses and insightful observation…there is a lot of common sense applied liberally…” -- Package Design

From the Publisher