Customers’ Behaviour

Dealing  with  your  Customers’  Irrational  Behaviour

It’s sometimes difficult to spot examples of ‘irrational behaviour’, ie: decisions that are made that defy a rational explanation:

• smoking notwithstanding the many health risks;
• racking up credit card debt rather than dipping into our savings;
• refusing to subscribe to an online daily newspaper for $1.00 a week even though we used to pay far more than that a day; or
• baulking at buying a sandwich on a ‘Jetstar’ flight –  even though the cheaper fare saved you way more than the cost of silver service lunch,

are all examples of irrational behaviour.

It’s likely that these behaviours wouldn’t have struck you as strange unless they were pointed out to you.  Why?  Because they are part of the ‘normal’ way we go about life.

The problem is that if you can’t spot irrational behaviours  –  which are everywhere  –  it becomes difficult to design a business around them.

And why would you want to spot irrational behaviours?  Answer: because everything we do in business (and in life) is about getting people to do something  –  for example: read, listen, watch, stand up, walk, talk, click, read, buy or sell  –  and you can do it far more effectively if you know what sits beneath human behaviour.

There are three places you need to start looking for irrationality:  ‘Me’, ‘Them’ and ‘There’.

1.   The “Me” Context: How your customer is naturally geared

These are the core behavioural tendencies that govern decisions – even when we’re by ourselves.  That means your customer will have these tendencies before they see your shop, marketing or product  –  and even before they are influenced by what other people might be doing.

Questions to ask yourself about your customer:

• What are they using now instead of your product?
• What do they have to give up to change?
• How does this fit with their beliefs about themselves?
• Is it immediately gratifying?
• Can I create the right mood?

2.   The “Them” Context: How your customer is impacted by others

Thankfully we’re not often alone on a desert island.  People usually surround us, and the “Them” context irrationalities are about how each of your customers’ behaviour is impacted by others.

Questions to ask yourself about your customer

• What do they see others doing?
• How will doing business with you affect their status?
• Whose authority will be persuasive?
• How can you ensure they feel unique rather than just another number?

3.   The “There” Context: How your customer is impacted by their environment

Of the three domains the most obvious is the marketplace.  Here, behavioural irrationalities are shaped by the environment in which your customers’ decisions are being made, for example your website, office or shop appearance  –  and how things like lighting, noise, packaging, shelving, point of sale and competitor proximity impact.

Questions to ask yourself about your customer

• How is your customer impacted by the environment in which they are deciding and consuming your product? For example by lighting, smells, noise, temperature, packaging, whether alternatives are available, your branding and your choice of typeface / font?
• Is there a different way you can describe your offer to frame it to advantage?
• What clues are you providing about whether you are:
  • a price sensitive shop, product or service (eg: ‘JB Hi-Fi’ that makes everything look like it’s always on sale); or
  • high end (eg: ‘Apple’ who never has any of its products on sale)

These three (3) contexts can improve your effectiveness.

By thinking through the ‘Me’, ‘Them’ and ‘There’ contexts you will start to paint a picture of how your customer is likely to behave  –  as a result of which you can be more deliberate and assured in how you design your points of engagement for the purpose of driving conversion of ‘prospects’ into ‘customers’.

Peter Kerin