Required Reading: Think Again. And Again.
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Despite all the talk about metrics—see our feature “Mistaken Metrics,” October 2009, for some of that discussion—when it comes to making smart decisions, thinking too much may hurt more than it helps. Despite the titular assertion of William Cusick’s new book—All Customers Are Irrational—the author’s argument is not that customers are unreasonable, but rather that they often make decisions without necessarily being able to articulate why. Associate Editor Jessica Tsai spoke with Cusick about the basis for any excellent customer experience: determining how the truth in consumers’ behavior trumps the content of their declared intent.
CRM magazine: Why shouldn’t companies try to make these irrational customers rational?
William Cusick: There’s a certain way our brains operate—95 percent of the cognitive activity taking place when any of us are dealing with the world is in the “irrational subconscious.” That’s not something you can change.
Only 5 percent of the brain activity going on is in the rational part of the brain. We make decisions on a very emotion-based level in this irrational subconscious and then we use the rational portion of the brain to explain to ourselves why we did something. We’re really all just guessing. We can create reasons, but we can’t necessarily be absolutely sure about what those reasons are.
I’ve dealt with companies that try to say, “Well, let’s make the customer rational,” and it doesn’t work. The customers don’t know why they do something in a certain way, or why they like something over something else.
CRM: Why is there such a disconnect when all people—even businesspeople—are consumers?
Cusick: This research is relatively recent. We were all working off the assumption that we know our thoughts, we know why we do things. “If we want to know if our customers are happy, let’s ask our customers if they’re happy. If the customers say they’re satisfied, then that’s good enough.” But from all the research that’s being done, what’s been found is that what we say is not very reliable. How we behave is very reliable.
CRM: What can companies control, then?
Cusick: If you know past-behavior patterns, you can start shaping customer experience in ways that will influence customers to do things that maximize profits or encourage cross sells and referrals.
If companies understood past or current customer behavior, that would go a long way toward being able to predict how to improve things for future-desired customer behavior.
CRM: Will the Web and social media help the need for behavioral insight? Or is it just another data point?
Cusick: It can make it easier to determine customer behavior because you’re taking some filters out of the feedback system, certainly. Social media is a truer, closer portrait of what your customers want. There’s lots of opportunity to track behavior with your Web channel because you can see exactly how customers are acting.
CRM: What, then, continues to be the barrier to a better customer experience?
Cusick: Businesses still don’t undertand the exponential financial impact of improving customer experience. Spend a little more on keeping your customers and you pull some of that waste out of the acquisition cost.
The customer experience is kind of the bastard child because it’s not a real thing for a lot of companies. There are “chief experience officers,” but they’re not necessarily empowered to impact change across functions. The customer experience, by its nature, transcends siloes. [See “No Substitute for Experience,” page 22, for more on customer experience.]
Internally, it can be a no-win situation for whoever the champion is. They’re fighting upstream the whole time with the internal structure of the company.
CRM: How should they begin?
Cusick: We preach incremental improvement. First, you need an honest appraisal of what your actual customer experience is. Try to map out three months of the customer experience—how you’re driving customers to behave, how they are behaving—and you can identify issues and take actionable steps.
If you can incrementally start fixing things, people start seeing that and you get advocates. I’ve seen too many times where people try to quote customer initiatives and it’s doomed because they don’t have engaged employees who are sold on it.
CRM: Did you toy around with any other concepts besides “irrational”?
Cusick: “Irrational” can be a confusing [term] because people think of the irate customers who demand satisfaction at all costs and are unreasonable.
But I think it’s the truth—we are irrational. There’s a lack of understanding of what this knowledge means for being able to dramatically improve the customer experience and not do it in any disingenuous way, not trying to trick customers because we know how they think. Given that we are irrational, businesses should not try to defeat or overcome it, but understand it and develop their research and products so that it works.
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