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Industry Secrets Leaked – Predicting Customer Behavior!

by Colin Shaw on March 1, 2016

Imagine the power of being able to predict  your Customers’ behavior. It would mean that you can design an experience that plays into this behavior and creates an excellent Customer Experience that drives $$$ for you.

However, reliably predicting your Customers’ behavior is going to be difficult even under the best of circumstances. Often, organizations stymie themselves by making bad assumptions about what is motivating their Customers preferences and choices. To be fair, it’s not their fault; people are not aware of the influences that drive their decision making.

Let me give you an example from a wine store. On one day, the store played classical music from French composers as people shopped. On another day, the store only played music with strong German associations. Guess what happened? On the days when the store played French music, about 80% of Customers bought French wines. On the days when the store played German music, more people bought German wines than French wines.

If you asked them why they bought the French or German wine on those days, Customers wouldn’t say, “Because they had been playing French/German music.” Instead, they might say, “We hadn’t bought this variety for a while so decided to give it a go.” Customer’s behavior was altered without their knowing anything was influencing them at all.

Many retail stores have been changing Customer behavior for years without their awareness that it occurs, although not always with highbrow methods like the nationality of the composer of Classical music. Grocery Stores know that shelf placement at eye level is the most accessible by Customers. They also know that people tend to walk around the shop and not up and down every aisle. So, they design their layout accordingly.

Restaurants and Casinos also use methods to influence the behavior of their patrons. Restaurants design the menu to minimize the diner’s awareness that they are spending money by eliminating the decimal points and dollar signs. They also draw attention to a big sampler or surf and turf selection that is priced high so that the rest of the menu looks like a comparative bargain. Casinos plan their floors to maximize participation in the gaming. Who hasn’t been trying to find a bathroom in a Casino only to wander through a maze of gaming options along the way? However, the ways to the ATM are practically lit with neon!

However, Customers aren’t aware of these influences. They think they chose the Petite Filet because it’s a lean cut of beef at a reasonable portion size. Or that they were feeling their luck change when they saw that poker machine on the way to the loo. Customers say they bought cookies at the store because they deserved a treat—not because they were positioned at eye level and on sale!

Retailers have long been anticipating their Customer’s decision making, but not because they asked them why they made the decisions they did. Instead, they influence their Customer’s behavior by understanding how people make decisionsand then designing their experience to compliment that behavior.

As the great philosopher and famed baseball coach Yogi Berra once said, “It’s tough to make predictions, especially about the future.” Well said. I would add that making predictions about your future behavior tends to be even tougher!

If you want to predict what people are going to do, then you need to understand their behavior and motivation. This understanding comes from a field called Behavioral Economics, and the topic of my next book, (Palgrave Macmillan, 2016). When you understand why people do what they do, you can better anticipate their future behavior—and get them to drink more of your French wine!

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Colin ShawIndustry Secrets Leaked – Predicting Customer Behavior!