Are You Making THIS Mistake with Theory in Your CX Strategy?

A theory is all very well and good. However, if you can’t apply it to solve your practical needs, it is useless. However, there is another crucial thing you need to know about theory, especially regarding Customer Experience. People get theory wrong with Customer Experience. A lot.

We discussed a common mistake a lot of people make with psychological theory in our recent podcast. If you are making this mistake, too, we also shared how to fix it.

What is the mistake? When you are working with psychology theory and the science of analyzing human behavior, here is what you can’t do anymore:

You can’t apply one psychological theory to everyone all the time.

This idea is significant and different from what we expect with science. We learn from a young age that science is constant. For example, the theory of gravity always holds, as demonstrated by Wile E. Coyote, via Looney Tunes.

However, the same cannot be said for many of the psychological theories that apply to human behavior. Instead, these theories are contingent. The variables like setting, personality type, time of day, the significance of the outcome, etc., all affect how the psychological theory will influence the outcome.

The Problems with Theory and Customer Experience Strategy

Everyone is after a simple solution for their Customer Experience improvement plans. However, a simple solution does not exist. Customers are not simple.

Unfortunately, people don’t believe the simple solution doesn’t exist. Instead, they find their newly-learned psychological theory pertains to every situation and is the simple solution they seek. They think, “Aha! Yes, I knew it. This theory applies all the time, and it will solve all our problems.”

For example, let’s take the Two-System Theory, aka, the Intuitive System and Rational System thinking concept I write about all the time. The theory says that people think fast and emotionally with Intuitive Thinking, and slow and logically with the Rational System. The two systems are in action at different times and interact in various ways to make decisions.

Unlike gravity, this theory is broad and has wiggle room in it. The Two-System Theory doesn’t say people use either one system or the other. It doesn’t even say how often they use either method. Instead, it explains how our brains think when we are making decisions.

However, even though Two-System Theory is broad, it doesn’t apply everywhere, nor can it explain all of human behavior.  The theory is limited.

An example of where it doesn’t apply is addiction. It seems like it would fall under the Intuitive System, which happens to be the system that governs habitual behavior. But addictive behavior can be chemical, meaning your brain creates a chemical associated with the action, which the body then becomes accustomed to and craves more. All of this chemical detail, however, is outside the parameters of Two-System Theory.

Two issues exist regarding applying theory to Customer Experience:

1. A theory is contextual. It doesn’t happen all the time. It depends on a lot of variables. How you design your experience will change the context of how the customer reacts to it. How customers feel coming into the experience, if they are tired or hungry, if this is a minor issue when they are grappling with larger ones, and so on, all of these factors change how a person behaves in your experience.
2. Theory is not easy. Human behavior and the arguments that explain it are complicated. Multiple issues can be in play at one time, all of them affecting Customer Experience. It makes customer behavior theory a fuzzy area, which makes it difficult to get a commitment from the team to make fundamental changes to business as usual to improve Customer Experience. Instead, they choose to focus on something more concrete or more comfortable to manage, like shipping times, pricing or how the website flows or other factors in the experience.

How Should You Apply Theory to Improve Your Customer Experience?

Even grand theories in the social sciences only hold most of the time. There will still be times approaches do not work or do not produce the results you expected, even with the most robust psychological theories.

Here are three suggestions on how to apply theory to your Customer Experience Strategy:

• Consider what conditions need to exist for the theory to apply.

The circumstances of the situation matter. If you find yourself excited about a theory and discover that you apply it to everything, you need to establish conditions.

For example, customers react another way when they are tired. The reaction you get presenting the same process to a customer in the morning is unlike what you would get at night after life has happened to them. The person is the same, but the context of how they are feeling is different.

When you understand how the customer is feeling coming into the experience, you can make a better guess how to apply the proper theory to optimize the experience for them.

• Experiment with what you use.

Use the psychological theory to make a hypothesis about what will happen if you apply it to your Customer Experience. Then, test it.

You can experiment in a few different ways. You could run a trial and see what results you get. You can try two different versions of something and see which is more successful. You can record data about the outcomes based on the context of the exchange. For example, compare the close rates before 10 am vs. close rates after 6 pm.

• Learn as much theory as you can.

As global Customer Experience consultants, we always talk about how psychology affects how your Customers behave. We also say that the path to customer loyalty involves understanding your customers at a deep level. Both of these areas are vital to moving your Customer Experience to the next level.

When you know your customers, it means you are watching their behavior looking for patterns. Meanwhile, you have been learning about psychological theory that influences how customers behave the way they do. Over time, you might discover that your customers are acting a certain way and then see that it resembles what you learned about in psychological theory. Then, you can incorporate the assumption into your Customer Experience strategy to make it more beneficial to the customer.

In other words, learning what customers do and the theory about why customers do what they do can help you match up moments to apply theory that makes the experience better for customers—and better for your bottom line.

Just be aware that it is never one thing at work. Multiple effects of the various human behavior theories could be working together to affect the outcome. (It is called high causal density.) One could be stronger than another at a given time.

The bottom line is when it comes to people and their behavior, be aware that everything is a hypothesis. Unlike hard sciences, people are unpredictable and rarely give you absolute truths, like physics does with the law of gravity. However, knowing and understanding the psychological theory behind customer behavior will help you form better hypotheses and ask better questions.

Business isn’t going to get any easier in the coming years. There are no simple solutions or magic theories that are going to make Customer Experience any easier, either. We have to stop trying to apply the same thing to every situation and expecting a predictable outcome. People are a lot of things, but predictable isn’t one of them.

To address the complicated landscape of business today, as well as tomorrow, you need to understand these concepts to move forward. Few people understand the theory behind customer behavior, and if you do, then you will already be way ahead of your competition. Furthermore, you will be able to implement it in your Customer Experience before they do, too. And who doesn’t love beating the competition?

If you want to benchmark your organization’s performance in the new world of behavioral economics against other companies, take our short questionnaire.  Once you submit, we compare your answers against what we know about the market and send you a free personalized report about where your organization is today.

Hear the rest of the conversation on “The One Thing You Need to Change” on The Intuitive Customer Podcast. These informative podcasts are designed to expand on the psychological ideas behind understanding customer behavior. To listen in, please click here.

If you enjoyed this post, you might be interested in the following blogs and podcasts:

FIVE WAYS TO KEEP YOUR CX PROGRAM ALIVE AND WELL IN 2019

IGNORING CUSTOMERS’ RISK AVERSION IS RISKY BUSINESS

THE BIG DANGERS FOR ‘CUSTOMER EXPERIENCE’ IN 2019 – EXPERT DEBATE

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX