What Makes Customers Tick?

Excerpts from What Makes Customers Tick?
Lewis P. Carbone, in Marketing Management

Most businesses have no idea why customers behave as they do 

• There's never been a better time or a more compelling reason to get to know your customers. Given the challenges facing business today, it's not surprising that the Marketing Science Institute lists "greater insight into the customer experience" as one of its top research needs. Increasingly, we have the means to achieve that end. Innovative new approaches and research tools are now becoming available to help businesses expand their view of customers and dig deeper to understand what truly makes them tick.
• The practice of going directly to consumers to find out what they think about a product, service, or experience is a basic foundation for business decisions every day. Implicit in this practice is the assumption that customers will accurately report their thoughts and desires. Yet time and again companies engage in painstaking and expensive research to guide new initiatives, only to find that consumer behavior in the marketplace bears no resemblance to what their research indicated.
• Marketing has always been based on taking consumers at their word - on grilling them for insights about their tastes, buying habits, and brand attitudes. Yet approximately 60%-80% of all new products fail. Why? Because traditional research doesn't take into account how the consumer mind works.

How the Brain Works

Up to this point, much of the effort put forth to understand customers has dealt with how they behave and what they have to say. What has not been developed -- in large part because the capability hasn't existed -- is a deeper understanding of why customers behave the way they do.

• Most conventional market research assumes customers understand how they develop preferences and feelings about their experiences. However, we're learning that the conscious choices consumers make are determined almost exclusively through unconscious processes.
• By relying on consumers to accurately report why they act the way they do, popular research methods like focus groups and surveys very often force customers to develop "intellectual alibis" -- to make sense out of things that they simply aren't able to articulate due to their subconscious origins. Instead of the real reason for buying or not buying something, these conscious-centered approaches result in rationalizations based on how people think they ought to be motivated.
• The good news is that in the last decade neuroscientists have learned more about how the human brain works -- how people process data, both consciously and unconsciously -- than in all previous centuries combined. Because of this, we can now begin reaping valuable insights based on how customers formulate their thoughts and preferences about a product, service, or the total experience.
• In particular, modern neurological research shows that people don't think and draw conclusions in linear, hierarchical ways or in exclusively conscious ways. Instead, they glean cues and bits of information from all the senses, above and below awareness, to form a composite experiential impression that becomes a basis for preference, loyalty, and advocacy.

What Customers Can't Say

• Opinions, even though they are conscious expressions, seldom tell the complete story. Science is proving that the unconscious dynamics of customer thinking provide the richest understanding of attitudes, behavior, and loyalty tendencies. Studies in neuroscience have revealed that as much as 95% of all thinking occurs in our subconscious, which means it is also the starting point for conscious action.
• It's that dynamic linking that explains the failure of conscious-focused research activities to correctly predict consumer responses in the marketplace. Like the tip of a very large iceberg, the rational reasons consumers give for their buying decisions and preferences are highly influenced by the mass of information below the surface of consciousness. By the time people become aware of a decision on a conscious level, it has already happened in their unconscious mind.

Choose Your Tool

• New approaches are emerging that provide windows into unconscious consumer thinking. And "experience management" perspectives and techniques are making it possible to translate that information into more relevant day-to-day interactions.
• In How Customers Think, Gerald Zaltman states that the foundation for understanding customers is to "draw on research from an array of disciplines to extend managers' comfort zones." Those disciplines may range from musicology, neurology, philosophy, and linguistics to the more familiar fields of anthropology, psychology, and sociology. Combined, Zaltman notes, they give marketers powerful new tools to help them "better understand what happens in the complex system of mind, brain, body, and society when consumers evaluate products and the experiences they have with them."
• What follows are some examples of innovative approaches in the areas of interpersonal, observational, and linguistics research. From them, it will become more obvious how drawing on an array of disciplines offers marketers expanded options for putting together a more complete picture of consumers.

Thinking Metaphorically

One of the most productive of the innovative research strategies pioneered by Zaltman is the study of the metaphors that consumers use to express their thoughts and feelings (the Zaltman Metaphor Elicitation Technique, or ZMET for short).

• A metaphor is a way to understand one thing in terms of something else. For example, the metaphor of "being in good hands" has nothing to do with being physically touched or held, but the meaning is clear.
• Neuroscience has revealed that humans think more in images than in words. For this reason, metaphor elicitation researchers rely on visual images chosen by respondents in one-to-one customer interviews to help surface metaphors. When recognized and probed for the thinking behind them, metaphors are considered reliable vehicles for transporting unconscious thoughts to conscious awareness.
• This is enormously useful information because, as Zaltman states, "no matter what the characteristics of a product, experience, or brand, it will always be initially perceived by consumers in some organizing framework or metaphor." What's more, universal metaphors are often revealed after probing just a handful of interview respondents. Once surfaced and recognized, these metaphors become an invaluable form of shorthand for understanding how offerings and experiences fit into people's lives. And those insights often become the basis for new product designs, communications, or experience designs.

Learn by Observing

Most businesses rely on that hard data in lieu of observing consumers in their natural settings -- and often miss important insights as a direct consequence. But companies are discovering that simply observing customers offers a wealth of information they cannot get with traditional research methods. With enhanced technological capabilities, watching consumers in their natural settings is becoming an important part of the expanded research mix.

• During development of Quicken, its top-selling accounting software, Intuit brought users into labs and even sent engineers into people's homes to see how they used the product. This took engineers a step beyond what customers verbalized and enabled them to see how clients physically used the product. "This type of observation gives you a depth of understanding beyond which customers can articulate," says Craig Cunningham, CEO of Customer Integrated Solutions, a consultancy that helps companies create client-driven initiatives. "It gets you past what clients think they need and helps you see what they really require."
• Paco Underhill, a retail anthropologist, has done considerable research documenting the "science of shopping." Through video observation and customer interviews, he has observed more than 1,000 distinct shopping elements, everything from how shoppers negotiate department store doorways on a busy Saturday to how often they touch the merchandise before buying and the intricate ballet of product placement on the shelf.

The Right Words

When an organization understands the effect of certain words in specific contexts, and is able to cue metaphors where possible, the impact of its communication can improve exponentially. The fast-deepening science of linguistics offers marketers exciting ways to understand customers and communicate more effectively with them.

• Charles Cleveland, founder of Communications Development Corporation (CDC) and former director of the Academic Computing Center at Drake University, has developed patented conversation analysis software that can make ultra-fine distinctions in the human communication process. It does this by comparing the language of one context (or group) to another and recommending the necessary language shifts to move to the desired context.
• To see the power of even simple nuances, consider this example from "The Little Words in Life," a paper delivered by Cleveland in 2000 as part of the University of Toronto Distinguished Fellow Series. Imagine you are renting a car at an airport. And you're in a hurry. The agent at counter A says, "I'll have a car for you soon." The agent at counter B says, "I'll have the car for you soon." Which car agency would have the edge in making you feel most confident that your need was understood and it would be met? Most likely rental counter B because the words its agent used, "the car," imply it has a specific car picked out, creating an impression that the vehicle is being readied just for you and will be brought down in a minute. At the other counter, "a car" left a more general impression -- it's even possible someone might still be out searching for a car in the lot.

The implications for how customers experience businesses in the years to come are profound. Organizations that develop expanded approaches for understanding their customers will gain powerful competitive advantages. It's the difference between trying to make judgments from a single snapshot or having an array of perspectives from different vantage points that offers a far more holistic and truthful picture. The ability to play back a video, assess body language, gain insights from verbal contexts, or surface meaningful metaphors will lead to far more relevant connections with customers, which will lead to greater differentiation, loyalty, and value for all concerned.

Read: Lewis Carbone, Clued In: How to Keep Customers Coming Back Again and Again
Hear: Lou Carbone & Chuck Feltz, Experience As A Value Proposition
See also: Gerald Zaltman on Creativity

Comments

[David Maister]

Clearly advances are being made, but I worry a great deal about the applicability and functionality of all this to the world I serve: the professional service businesses. They deal not in aggregate market research "How customers en masse tick" but with individual (high-powered) buyers. They must learn "what makes this person tick" which is a completely different skill and level of analysis. We need to develop methods that lay people can use in specific situations, not research tools that we can apply as third-party contractors.

It's kind of like asking Freud's (unanswerable) question "What do women want" when the real need is to develop the skill "What does this person in front of me want?"

- Good points, David. I work in retail, and so find value in studying how segments behave, but ultimately it’s understanding the individual customer that closes the sale. Much of the material in the “What customers want” section of this blog apply to individuals as well as groups. If you could point me to published research on “high-powered buyers” of the kind you deal with, I’d appreciate it. - Leo