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The Intuitive Customer - Helping You Improve Your Customer Experience To Gain Growth

Sep 26, 2020

How Well Do You Know What You Really Want?

Have you ever bought a book you thought you should read and then didn't read it? Did you ever buy a variety of yogurt flavors and then throw out some of them after they expired because you never wanted that flavor when it was time to eat yogurt? 

We do these things because we often overestimate how much variety we want in the future. In psychology, it's called Naïve Diversification Bias, and it means that we are notoriously bad at predicting our future selves' wants. This episode of The Intuitive Customer explores this concept and what you can do about it for your customer experience. 

Key Takeaways 

As always, with the behavioral sciences, Naïve Diversification bias isn't the only thing that is happening when we make these forecasting errors. However, it is a significant driver of these decisions to overestimate our desire for variety in the future. Here are a few things to remember about this psychological concept that influences customer behavior:

Research shows we choose the same thing in the moment, and more variety for the future. Itamar Simonson, Ph.D., The Sebastian S. Kresge Professor of Marketing at Stanford University, showed in the 1990s that we do this. When his students chose snacks for the next three weeks ahead of time, he saw that they picked more variety than when they decided the snack for the day each week. 

We all overestimate our need for variety in the future. Naïve Diversification bias is one we all share. Part of the reason we choose more variety in the future is that we think we want more variety than we do. When the future becomes the now, we are content with the same choice, usually our favorite one. 

Naïve Diversification Bias does not mean people do not want a variety of choices. People like having options, just not too many of them. However, most people don't know that they don't like having too many choices until they face them, and they feel overwhelmed. 

Mapping out customer behavior can help you identify Naïve Diversification Bias when it occurs. Many organizations participate in journey mapping, which is an excellent way to identify these moments in the customers' process. However, it does not show customer behavior. Behavioral Journey Mapping takes traditional journey mapping to a new level that helps you see what customers do and how their choices could be creating dissatisfaction for themselves.

Recommended Actions

There are a few ways to mitigate the consequences of this natural bias we all share. Here are our suggestions for combatting its effects in your customer experience:

  1. Be able to recognize Naïve Diversification Bias. It is essential to know what is when you see it. Identify where in your experience it occurs and the circumstances that surround that decision-making moment. 
  2. Understand that customers change their minds. Knowing that regret is not an emotion that drives value for your bottom line, find ways to mitigate the effects of Naïve Diversification Bias in your experience whenever possible. We recommend discovering these moments by mapping customer behavior rather than process. 
  3. Develop strategies to manage the potential negatives of the bias. To improve the experience for them, offer customers opportunities to remedy their wrong choices. Have a clear return policy or give them regular opportunities to re-evaluate their options in subscription services.
  4. Compress the time between choice and consumption. People make choices that create more satisfaction when the timeline between the decision and the time they use or consume the product is short. Whenever possible, it would be best to shorten this interval to facilitate customer satisfaction with their choices.
  5. Build filtered-diversification into your offer. When customers make decisions for future consumption, they want options. However, if you present too many choices, you can overwhelm customers. Therefore, we recommend offering a wide variety of products or services and a way to narrow down the field from which the customer can choose. This way, you offer enough choice to satisfy customers and prevent them from getting weighed down from too many options. 

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About Beyond Philosophy:

Beyond Philosophy help organizations unlock growth by discovering customers' hidden, unmet needs that drive value ($). We then capitalize on this by improving your customer experience to meet these needs thereby retaining and acquiring new customers across the market.

This podcast is produced by Resonate Recordings. Click here find out more.