How Customers Make Rules for Themselves

How Customers Make Rules for Themselves

by Colin Shaw on November 22, 2018

I have a rule with large purchases; I always sleep on it. I do it to ensure I want to make the purchase and not merely susceptible to a sales technique. Plus, it’s a significant expenditure, and I don’t want to make a mistake. This rule works well for me.

Your customers have rules, too, and they use them in your Customer Experience. Understanding how and why customers are making these rules can help you provide the type of Customer Experience that makes buying from your organization the customer’s rule of thumb.

We discussed how people set rules for themselves in our recent podcast. We explored why we use mental shortcuts when making decisions, how these shortcuts influence our behavior as customers, and when these behaviors become customer rules.

Irrationality is the Basis for Our Rules

Before we go any further into this topic, we should review a critical fact about your customers: they are irrational. This irrationality we all share as customers manifests in how we make decisions.

Despite what you might have thought, people’s buying decisions are usually emotional and then justified with logic. Very few choices in life are entirely rational, and even fewer are that you make as a customer.

That is not to say we can’t make rational decisions. We are all capable of it; we choose not to do it.

We skip rational decision-making because rational thinking takes a lot of time and energy. Time and energy might be worth it for some decisions, but for others, not so much.

Instead, we use short-cuts to help us make decisions. Sometimes these shortcuts are habits, automatic behavior that we have adopted. Other times we have heuristics, like choosing the option in the middle or medium size or picking the brand we feel has the best reputation to help us make decisions. Sometimes, we also make rules, like my rule not to make any significant expenditures without first sleeping on it.

Hear the rest of the conversation on “How Customers Make Rules for Themselves” on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

These rules apply to all kinds of situations. For example, my colleague Professor Ryan Hamilton of Emory University has a friend who only buys fish that is on sale at the market. Her theory is that it is on sale because it is the freshest fish. (Incidentally, both Ryan and I have some issues with her logic.)

There are rules for not buying, too. One of my team always leaves the item in the store when she isn’t sure if she wants to buy it. Her rule is if she regrets not buying it later, she will go back and get it.

These rules work pretty well most of the time. However, the idea behind the rule is it makes it easier for the customer to make a pretty good buying decision most of the time. Like habits and heuristics, the rules we use are shortcuts to decisions that take a lot of energy to make.

However, rules don’t always work. For example, I have another rule always to book my flights on Delta because they are competitive and fly anywhere I need to go. One time I had a meeting in Washington D.C. where I was meeting one of my team, who lived in Atlanta. My team member booked Southwest and arrived five hours before I did, and non-stop.

Had I broken my rule and looked at other airlines, I might have had a shorter and more convenient flight. That said, my rule works pretty well most of the time.

How to Make Your Organization the Rule of Thumb for Your Customers

It is crucial you figure out what habits, heuristics or rules your customers are using when they evaluate your product or service. Sometimes it is in line with rational decision making, but many times, it is not.

Once you have an understanding of how your customers arrive at a decision to buy with you, you can get to work. You use that “how” to design an experience that helps them get to yes. You can engage with them, anticipate their needs, and make their experience outstanding.

Here is an example of what I mean. If a restaurant has white tablecloths and fabric napkins, many customers perceive the restaurant as upscale. They are more likely to participate in the experience as if it were a fancy restaurant, meaning they are more likely to order drinks and wine, and probably even dessert, all of which increase the bill. Customers use the way the restaurant set the table as a shortcut in their thinking for how their experience is going to be and adapt their behavior to this perception.

On the other hand, if customers order at a cash register and sit in a booth with a plastic seat, they are far less likely to order alcohol or dessert. Customers will perceive the experience as more casual and adapt their buying behavior to reflect that.

So, if you had a restaurant that wanted to boost its sales or alcohol or increase the amount spent per table, you might consider how you can make your experience more upscale. Is it adding tablecloths and cloth napkins? Is it putting a wine list on the table? Is it changing the seating in the restaurant to seem less casual and more chic? Maybe a big bowl of mints on the way out?

However, I would add that it is never one thing. It’s a multitude of things working together that drive behavior.

Once you understand how people make a decision about your experience, you can focus on those details and optimize them. These details could help you present your experience in a way that gets you the results you want. After all, it’s how they are making the decision anyway.

If you can find out what your customers are always doing and understand the rationale for why they are doing it, then you can optimize the design of these moments. If you don’t really understand what your customers are doing and why you can end up optimizing the wrong things.

The future of Customer Experience lies in understanding the data you have about customers at a much deeper level. Many organizations don’t. If you do, you will have the competitive differentiator you need to get the results you want. It can give you a real advantage, which can lead to your Customer Experience ruling the category.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawHow Customers Make Rules for Themselves