By Dusty Weis, AEM Strategic Communications Manager

Selling construction, agriculture and utility equipment ought to be easy. But it’s people that are complicated, and understanding what makes them tick can ultimately make or break your business.

Charlotte Blank is the chief behavioral officer at Maritz, serving as the consulting firm’s go-to expert on consumer psychology. With a background in neuroscience and behavioral biology, she takes an experimental approach to understanding what drives the relationships between customers and the brands they patronize.

“I’m no longer doing brain surgery, but I’ve evolved from rats to much more complex creatures… humans,” Blank says. “I’m just endlessly fascinated by these underlying subconscious drivers of our behavior.”

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At AEM’s most recent Thinking Forward event in Washington, D.C., Blank led a group of members through a series of research experiments that demonstrated the importance of four questions they should answer if they want to build stronger, longer-lasting relationships with their customers.

 

1.) How Do We Show Customers They Belong?

We’ve all seen them in hotels—the placards in the bathroom that implore you to re-use your towels because it’s better for the environment.

“It’s okay that it also saves the hotel money on washing towels, but almost invariably the message they’re putting on this placard is about the greater good and the environment,” Blank says.

Blank tells the tale of a 2008 study that sought to test this approach, and discovered that perceived peer pressure was a much more effective motivator. While 35 percent of hotel guests responded to the environmental message, 46 percent re-used their towels if they were told that most guests do the same. A more strongly-worded sign noting that “most people who stayed in this room” re-use their towels pushed the results up to 53 percent.

“We tend to base our behavior on what others are doing, even though we would never expect this to work on us,” Blank says. “But all these influences operate on a non-conscious level.”

Tribalism, self-identity and the perception of peer pressure are powerful motivators, Blank says, especially for brands that can align themselves with their customers’ “in” group.

 

2.) How Do Customers Know They Can Trust Us?

Ever wonder why Amazon prominently displays customers’ complaints about products it sells, even though that would seem to undermine its goal of selling more products? Not surprisingly, for a company like Amazon, it’s a decision driven by data.

“Paradoxically, it turns out that showing the top negative review for a product actually increases sales in the short term,” Blank says. “And in the long term, it’s a more profitable strategy as well, because you’re helping people self-select into the best fit for them.”

Blank says that transparency is so effective as a tactic because it demonstrates to customers that a brand can be trusted and has nothing to hide. Not only does this engender goodwill, she says, but it can actually make customers willing to pay a premium for the product.

Consider a case study where psychologists studied the marketing tactics of Everlane, a San Francisco-based online clothing company. The company has gone so far as to post a pricing breakdown that details material, labor and shipping costs for each product, as well as the company’s take in mark-up and profit.

That honesty, according to Blank, bought Everlane a 36-percent boost in purchases compared to more traditional marketing tactics.

“There’s qualifiers here and more research to be done, but surely this is something that is underutilized and could be explored more.”

 

3.) How Do Customers Find Value in Our Products?

That idea of transparency transcends the notion of trust, Blank says, and also enters the realm of perceived value. The more customers understand the effort it takes to build and deliver them a product or service, the more they’re willing to pay for it.

This is especially true in modern society, Blank says, where digitization has automated more processes in commerce.

“As this happens en masse, it removes the visibility into a lot of the work that’s going on behind the scenes,” Blank says. “We lose sight of all the value we’re getting as things become increasingly digital.”

Blank notes two very different case studies: travel booking websites and online dating apps. In each, psychologists tested two types of systems—one that just performs a search and displays the results, and one that lists the various search criteria as they’re applied, displaying results as they populate and noting each step in the search process.

And in each case, Blank says, people are willing to wait twice as long and are twice as happy with the search results from the more “transparent” model that shows the behind-the-scenes work.

“We have this bias to not show how the sausage is made—keep that behind the curtain and just show the beautiful finished result,” Blank continues. “But actually, the more we can show, the better, in many cases.”

 


4) How Are We Rewarding Our Customers?

Trying to incentivize customer behavior with money creates some of the trickiest interactions for a company to navigate, Blank notes.

She points to a study in Israel where daycare providers were trying to get parents to stop arriving late to pick up children at the end of the day. They randomly sorted daycares into two groups, and in one group, they instituted a penalty fine for parents who showed up late. 

Almost unbelievably, the parents who were fined for being late were almost twice as likely to do so.

“It completely backfires,” Blank says. “When you change the dynamic and introduce money into the equation, it shifts their mindset into more of a transactional way of thinking. They’re thinking, that’s what it costs to show up late, that’s worth it to me, and I’ll just pay it.”

So if customers can’t always be counted on to do the financially sound thing, what can you count on? According to Blank’s research, the answer is found in “pro-social behavior” or “social contracts.”

“We explored this in the context of a consumer referral program which incentivizes customers to bring in new business,” Blank says. “Normally, these programs allow you to refer a friend and get five dollars, which is kind of selfish if you think about it. We asked what would happen if you make it generous—refer a friend and give them the incentives?”

And the hypothesis panned out—while only 1.7 percent of participants responded to the “selfish” incentive offer for a video game subscription service, 4.8 percent responded to the “generous” offer.

For Blank, it’s just another example of the complex psychology that goes into maintaining strong customer relationships in a new era of marketing and technology.

 

AEM members learned about this and other topics at a Thinking Forward event in Washington, D.C. on February 21. Visit aem.org/think to learn about more of these upcoming events in a city near you, including one at the Johnson Space Center in Houston, TX on March 12

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