A tricky meaning to Drucker’s quotation? Not really. But understanding why customers buy your products and services is certainly not straightforward. You need to put these secrets of customer insights to work to fully appreciate why customers make the decisions they do.
The customer never buys what you think you sell.
–Peter Drucker
How much time do you and your business dedicate to gathering customer insights? Not enough is the answer we hear most often. One way you can find useful insights is to examine research in social psychology. Here are 8 insights we found that should provide useful for defining tactics with your customers.
Good Service Trumps Fast Service
Recent studies show customers cite rude, incompetent, and rushed service as their top reasons to switch brands. Almost 20% more often than slow service.
Recent customers who receive competent, knowledgeable, and all-encompassing services are most likely to remember their experiences and tell friends about them.
Companies must maintain a clear and constant focus on the factors that represent the true health and sustainable growth of the company: the bond between the company and the customer.
Faster operations should only be pursued when they will result in stronger customer bonds. Anything else is a mistake, and one with lasting consequences.
In short, companies must bear in mind that “speed of service” contains two critical elements: speed and service.
Money discussion makes customers more self-focused
When you prime people with money, they approach their social interactions in a fundamentally different way than they normally would,” said Nathan DeWall, an associate professor of psychology at the University of Kentucky in Lexington, who has conducted similar research on the psychology of money.
“Whereas when most people are presented with the possibility of having an interaction with another person, with anticipated rewards that accompany that, when you prime people with money, they just approach it in a socially disengaged and less rewarding manner. And this has profound consequences for their behavior.”
Research by psychologist Kathleen Vohs has shown that when people are primed with money issues, they become more self-focused. And less willing to assist others.
This fact can be used by businesses in selling luxury items. The subject of money should be avoided however with promotions associated with doing things for others (i.e. Mother’s Day for example)
In a study from the Journal of Applied Social Psychology, researchers were able to increase the average tips that waiters received by over 23%, without significantly changing their service.
This was accomplished by having the waiter follow up with a second set of mints after they brought customers their checks.
Waiters that brought mints but didn’t follow up received an average of 7% less in their tips.
And from a different perspective, it pays to remember customers’ names and important information. It turns out that people are more attentive and interested when they hear their names. When working on building relationships, use names when appropriate.
Few sounds are as pleasant as hearing our own names. And likewise, for example, nothing makes us feel less loved quite like a post-purchase email from ‘DO NOT REPLY’.
New research from Stanford reveals that customers have more favorable feelings toward brands they associate “time well spent” with. Memories of a good time were more powerful than memories of great savings.
So, there is a reason that the lowest price companies promote having a good time (such as “It’s Miller Time) rather than their lowest prices.
Forget Suze Orman. Time, Not Money, Is Your Most Precious Resource. Spend It Wisely.
Innovate through customer collaboration
MIT’s Eric Von Hippel conducted a study with the Institute of Management Sciences on the relationship between superstar customers and company innovation.
The result? Through a study of 1193 commercially successful innovations across 9 industries, Hippel discovered that 60% came from customers. (See our article: Crash Course on Turning Customer Insights into Winning Ideas)
Surprise with acts of kindness
One of the most memorable and talked about customer experiences is a surprise act of kindness.
Zappos uses this experience with great success. Without so much as a mention on their website, Zappos regularly upgrades customers to overnight shipping free of charge. A great way to brighten customers’ days.
Loyalty programs can still be very effective
Consumer psychologists Dreze and Nunes were able to reveal just what makes a ‘sticky’ loyalty program, across all industries.
The researchers were able to show that customers are twice as likely to stay with loyalty programs if the programs appear to already have started. Tasks that seem to be underway are more likely to be completed. (See our article: How to Use Reward Card Programs Better for Enduring Customer Loyalty)
Customers prefer stories
Storytelling is most persuading so shows the research by Greer and Brock. Their research reveals that a well-told story is one of the most persuasive forms of community. They concluded that stories have the ability to take us to another place, permitting the story to be a marketing message without the marketing.
Remember, this is your time to create remarkable experiences in order to create lasting customer relationships. Lead with initiative … own the moment.
It’s up to you to keep improving your customer engagement and relationship-building performance and creativity.
All you get is what you bring to the fight. And that fight gets better every day you learn and apply new lessons.
When things go wrong, what’s most important is your next step.
Try. Learn. Improve. Repeat.
Are you devoting enough energy to continually improving your customer service?
Do you have a lesson about making your customer relationships better you can share with this community? Have any questions or comments to add in the section below?
Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of your business. Find them on G+, Twitter, and LinkedIn.
Digital Spark Marketing will stretch your thinking and your ability to adapt to change. We also provide some fun and inspiration along the way.
More reading on customer service from Digital Spark Marketing’s Library:
8 Ways to Create WOW Customer Service for Marketing Differentiation
How to Create Customer Relationships and Build a More Social CommerceWho Else Would Like to Hear This Business Loyalty Story?