Inconsistent Assumptions

A recent global survey of CEOs (1) highlights the unprecedented era of change that is reframing the relationships between customers and companies across the globe. Meeting the needs of increasingly demanding consumers, fuelled by digital disruption is now bringing the focus closer to a better understanding of human behaviour and customer decision making. Recognition too that technology is an agent for behaviour change and not an end in itself-making an organisations grasp of the understanding the influences around behaviour a core issue for its success.

Personally speaking, it doesn’t take much degree of self analysis to realise that human behaviour is not as simple or as rational as we would like to believe. But it is interesting that this obvious personal truth is not so clear in a business context. All too often, plans (along with most economic forecasts) are still developed with underlying assumptions of ‘rational buyer’ behaviour laddering up to confident expectations of straight line growth. This is despite recognising that technology has transformed traditional thinking around linear customer journeys to purchase and acknowledgement that the consumer is now ‘in control’.

The ‘rational man’ model was dismissed some time ago by academics as a poor explanation of how we actually make decisions. The evidence base from across the various fields of psychology and related disciplines, now championed by the behavioural sciences, offers a very different reality. We don’t have the mental space or time to weigh up the pros and cons of all the options we have for the multitude of decisions we face in our daily lives. We take mental shortcuts that bias our decisions, often occurring at the sub-conscious level which results in our actual behaviour straying some distance away from what might be forecast by standard economic theory.

The networked society operates according to the rules of human rather than pure economic behaviour. Emotional affinity is a key factor in our our decision-making which in turn is also shaped by the influence of our peer networks who have superseded conventional organisations as the key source of trust and authority. This was captured well by Kevin Kelly who (2) said:

“The dynamic of our society, and our new economy, will increasingly obey the logic of networks… we are connecting everything to everything”.


Re-focusing on Behaviour

In my experience, the need to think more deeply about behaviour and how to influence it is obvious when seeking to address some of the harder challenges facing society. For example, in the complex challenge to address obesity, a group of experts from across the disciplines developed the Obesity Systems Map, which using systems theory, mapped all the factors that contributed to the issue (3). Over 100 casual factors were identified operating at the personal, social and environmental levels and this explanation was used to develop interventions across sectors including the development of the government’s own Change4Life programme. It would be interesting to now apply the map against the proposed Sugar Tax to see whether the whole system is likely to positively move forward or simply compensate elsewhere to maintain the status quo.

The emergence of the behavioural sciences is not restricted to government and policy makers with its adoption growing in the private sector too – across industry sectors and across functions. For example, Barclays has established a wealth management business based on behavioural science (4) and technology companies such as Amazon are employing behavioural expertise. Examples of marketing more formally embracing the thinking are becoming apparent. For example, sell train tickets online but they sell the same fares as every other train company and cannot offer either discounts or exclusive fares. The marketing solution was to frame the discounts that can be achieved on in a way that brought consumers to the website. Encouraging people to buck the social norm of buying on the day (81% are still bought on the day) and do the smart thing of booking in advance. What was interesting is that they framed the price in terms of comparing an old behaviour with a new one and used humorous creative work to trigger a sense of loss aversion about the money wasted by not booking in advance – rather than just emphasising the savings made. The results were outstanding… In the first 18 months revenues grew by £137.8m and achieved an ROI of £2.42 for every £1 spent.

The diversity of adoption across the structures and disciplines of business points to the emergence of a lasting new tradition. But there is a more immediate demand to systematically connect applications across the siloes and provide a unifying route to meet the challenge of shifting customer behaviours that, according to the PwC survey, is currently preoccupying global CEO’s.


Creating a New Picture Around Shifting Customer Journeys

There’s a real competitive opportunity for organisations who apply an understanding of behavioural change to the customer journey – aligning both the customer experience and the organisation around human behaviour. The outcome being an organisation that is tuned into the patterns of behaviour of both its’ customers and itself, and able to synchronise experiences through a shared picture of how behaviour works within fluid markets.

The customer journey is no longer linear. Potential customers move at different stages and speeds through an iterative process of decision making, where associations are formed well ahead of entering a market and with active consideration supported by technology shaping new buying behaviour right up until the moment of purchase (e.g. the use of our smart phones before going in-store to check best local deals available). The subsequent customer experiences are often shared across personal networks to create positive or negative endorsements in what McKinsey have termed ‘the loyalty loop’ (5).

But we are only partially sighted to the new dynamics at play and without a full picture of what is happening and why. In particular, we are missing the hidden patterns of conscious and un-conscious influence as people build intention, interaction and experience across the stages of decision making in the marketplace. There are numerous models that explain various types of behaviour. In general terms behaviour can be explained by factors working at four levels – namely personal, social and local/macro levels. Harnessing these insights across the stages of the customer journey (see Diagram 1 below) will ensure that customer experience ‘goes with the flow’ of human behaviour.




And the picture is not complete until matched with an equivalent view of your own organisation’s behaviour and capability to deliver success at every touchpoint on this new customer journey. The effects we are looking to capture are multivariate and there is a significant role for behavioural analytics and ‘big data’ techniques here, but equally for a structured hypothesis on what is happening and what can be done to bring customers and organisations closer to create consistent value.


Capturing the Four Levels of Influence Across the Customer Journey

Formalising how behaviour works at each of these four levels will provide a new picture of behaviour and reveal the hidden influences at play.

1. Personal Factors

These impact the individual and affect the choices and behaviours he or she undertakes. Whilst these embrace values, attitudes and beliefs they focus on the factors that over-ride our rational selves. There are many biases that are well established such as ‘prospect theory’ established by Kahneman and Tversky (6), which demonstrates that ‘losses loom larger than gains’ whereby the fear of losing is at least twice as powerful as the pleasure of gaining with the result that people are more willing to take a risk to avoid a loss rather than a gain.

It is also linked to other biases such as the endowment effect where we overvalue what we own, in part caused by the emotional attachment we have for goods that provide some sense of ownership.

Leveraging these factors for customers and colleagues will be key to their re-alignment. For customers, prospect theory suggests that customising options within an early sense of ownership will reduce friction; and for colleagues, encouraging their full participation into change programmes will build a sense of ownership and help overcome the status quo.

2. Social Factors

These factors exist beyond the individual and act in a social context to influence behaviour. For example, we are heavily influenced by who communicates with us with their authority and trust is key to that influence. ‘Network theory’ also recognises that people are heavily influenced directly by what other people do and indirectly by our perceptions of what others would or should do. Hence the power of peer to peer networks in spreading ideas and influence and the explosion of social media. For customers these factors are critical drivers across the journey and likewise for the colleagues, who will be more likely to respond positively to peer to peer influence and respected role models than to mandates from above.

3 & 4. Local and Wider Macro Factors

These also have a huge effect on why people do what they do. They can constrain and shape behaviour including the macro factors of market conditions and technology, as well as the physical conditions in which they live and work. It also includes the more immediate situational context and moment of the decision. The key behavioural factor here is defaults, where we go with the flow of the preset options which then guide our unconscious habits and routines. Overcoming inertia is a key challenge for many markets with the financial and energy sectors obvious examples of where inertia presents the biggest barrier to change. For current bank accounts, the significant triggers to switching are a very poor service experience, life-stage changes and also local proximity to the bank, but despite making switching easier for customers through a new account switching service, inertia for the very large majority still prevails.

Typically in our planning we overestimate the conscious individual factors and under-estimate the social and local impacts and thereby make decisions based upon incomplete explanations of behaviour.


Applying This Systematically to Customers and Colleagues

Recognising the key behaviours and factors at play across the customer journey is the start point to redening the customer experience, which is very likely to then require process and behaviour change within the organisation to deliver the new service improvements, as described in Gary Ashton’s article. To enact that internal behaviour change, in a similar way to how you viewed the customer inuences, you then have to consider what inuences employee behaviour at a personal, peer, organisational level, to ensure a sustainable change through a common approach (see Diagram 2).

So developing a unified view of customer and colleague behaviours across the customer journey offers a route to informing the internal change in behaviour required to ensure sustainable change and a better customer experience. A four-step approach makes this a practical reality which can be readily validated through a testing programme. Without the dual focus on customers and colleagues as a constant, risks the intent for greater customer-focus remaining just that.

  1. PwC Annual Global CEO Survey ‘A Marketplace Without Boundaries? Responding to Disruption(
  2. Kevin Kelly is the founding executive director of Wired magazine and former publisher of the Whole Earth Catalog.  Kelly is considered an expert in digital culture
  3. P. Vandenbroeck, J. Gossens and M. Clemens (2007) ‘Tackling Obesities: Future Choices – Building the Obesity Systems Map
  5. The Consumer Decision Journey‘ McKinsey & Co (June 2009)
  6. Advances in Prospect Theory: Cumulative Representation of Uncertainty‘ Tversky & Kahneman (1992) Journal of Risk and Uncertainty