Why Customers Make Poor Brand Advisors
Harry Selfridge coined the phrase “the customer is always right” more than a century ago. As proprietor of London’s Selfridge’s department store, he built a business around the notion that retailers should listen to their customers and provide excellent service. Unbelievably, that was actually a novel concept at a time when many businesses actively sought to mislead customers to make a sale. Echoed by other retailers and then across all sorts of businesses, the maxim stood the test of time and helped to fuel a whole industry devoted to understanding what customers think. But most organizations take the quote literally, which is a problem.
Of course, the customer isn’t always right. Even Selfridge himself, we’re sure, would have (albeit politely) told a customer who walked into the store and asked for an 80% discount. Some customers are unprofitable and should be fired by the businesses that serve them. Still, it’s critical to delight your customers day in and day out, making it more likely that they return again.
When you combine a literal interpretation of Selfridge’s quote with an assumption that customers can tell you what they want, you get into a vicious cycle that looks like this:
- Believe the customer is always right.
- Therefore, I’ll just ask them what they want.
- The customers tell you what they think they want.
- Give the customers what they want.
On the surface, this feels conceptually right. It appeals to the rational part of our brain. But for all of you who have designed products to meet all the reported needs of customers and then seen them fail upon launch, this is the issue. In many cases, customers will tell you what they think they want – but those wants won’t translate into behavior in the real world because many factors beyond what we think we want influence our actions in the real world. It’s not that customers aren’t well intentioned; they are. But social scientists have shown time and time again the size of the gap between expressed preferences (what customers say) and revealed preferences (what they actually do).
Consider perhaps the most basic of purchases – replenishing your carton of milk. If consumers were asked all about the qualities they want in their milk, they would “overreport” their preferences for qualities such as fresh, organic, local, or other predictable qualities that you might name if you were trying to pit one brand of milk against another. But more often than not, the occasion determines the brand chosen. If you’re running to the convenience store to pick up milk because you ran out, you are quite unlikely to go to a second store if your “preferred” brand is unavailable in that location. If you move to a new neighborhood and your local grocery store doesn’t carry your old preferred brand, you’re more likely to switch milk brands than drive to get the old brand. Finally, the most likely way to understand what brand of milk you will purchase on your next trip is to ask what you purchased on your last trip (as about the behavior – not about the preference).
Milk buying – for most consumers – is a habit, and the only way to effectively change behavior is to disrupt the habit in some way. Simply giving the consumer their preferred qualities in a brand of milk and putting that next to the brand they’ve always bought is very unlikely to yield a successful change.
Higher involvement purchases are slightly more fraught. In those situations, customers perceive the risk of getting the choice wrong to be higher and therefore obsess over the deliberation – and their motivations – more than they would in buying a tube of toothpaste. Take a story out of real life.
Geoff was in the market for a road bike recently. Having watched his wife become consumed with the sport, he figured he should probably jump on the bandwagon if he ever expected to see her on weekends again. He knew very little about the machines when he went to the shop, and soon discovered just how deep that ignorance ran. He was led through all the relevant choices that he needed to make in order to configure the right bike for himself and came to (somewhat) understand the options behind the choices. He answered myriad questions about what he wanted to achieve, what hurt when he exercised, how often he imagined himself riding, etc. When he was done and had ended up with something that he had spent more than an hour helping to design and which cost roughly 10 times what he had expected to spend, the spiraling commenced. What else could he use this money for? Would he really ride as often as he imagined? Are there better ways to get exercise and isn’t this whole biking thing a bit of a fad? Plus, it’s dangerous, right? And what does his wanting to “catch up” to his wife in a sport say about their relationship and his place in it?! Maybe if he wanted to get cycling exercise, he should go the Peloton route instead just so he doesn’t run the risk of infringing on her private space.
Geoff walked out without buying a bike.
As it turns out, offering more choice, while it feels like you are giving the customer “what they want” can be paralyzing, as it was to Geoff. In 2000, researchers at Columbia University sought to understand the impact of selection on purchase behavior. They compared shopper behavior in two real-world situations. Under one situation, customers had a selection of 6 gourmet jams at an upscale grocery store. Under the other, there were 24 types of jams in the display. What the study revealed was that while the broader choice display made 40–60% of customers stop more frequently, purchase behavior was quite different. Only 3% of consumers purchased from the 24-jam display while 30% of consumers purchased from the 6-jam display. The incremental choice made decision-making harder, not easier, even though it’s what the customer would have indicated they want.
Years ago, a company such as Schwinn, with limited options, might have been able to ask customers which model they might prefer and get something back that was more reliable. Something as simple as good, better, best get consumers to respond in a more reliable way. But today, the configurations available with many bike options make it considerably harder for customers to reliably indicate preferences, especially for a newcomer like Geoff. The experience of building his bike increased his involvement to the point that he was overwhelmed with the feeling that he was making the wrong decision – and it wasn’t just because of the price.
Recent research in the fields of cognitive psychology, neuroscience, and behavioral economics have challenged the long-standing ways companies have learned about customers. The world now has a much richer understanding about how people learn and make decisions.
Contributed to Branding Strategy Insider by: Geoff Tuff and Steven Goldbach. Excerpted from their book Detonate with permission of the publisher, Wiley. Copyright (c) 2018 by John Wiley & Sons, Inc. All rights reserved.
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