Throwback Thursday: Consumer Psychology

consumer psychPop quiz: Are you average?

If you’re like most Americans, you probably think you’re smarter than the guy next door—especially when it comes to firing up a new appliance or electronic device. Marriott School professor Darron Billeter has been studying this type of consumer overconfidence for years, and his findings show that our propensity to think we’re above average leads to extreme self-doubt when we struggle to use a new product. In “Consumer Psychology” Billeter shares four ways companies can design products that keep run-of-the-mill consumers from feeling ordinary.

Lesson 1: Design products to feel familiar.

Billeter admits that he cast aside his PalmPilot because the prospect of learning new shorthand was too much. In fact, a 2006 study found that it only takes twenty minutes of failed efforts for customers to give up on a product. Billeter suggests that designers incorporate users existing skills and intuition in new products to help make it past the twenty-minute window.

Lesson 2: Hire a guide for your demo.

The learning curve for new products can be steep so make staff and experts available to customers. “Because of the strong behavioral implications of the effect, firms marketing products or services that require learning should invest resources to hold consumers’ hands during the initial stages of product experience,” Billeter says.

Lesson 3: Take advantage of technology and timing

It can be difficult to reach customers once they leave the store, but with current technology, like video chats, service professionals can walk users through difficult steps of a new purchase. “Even though you are not right there, firms can still control the process and be available when customers might be the most discouraged,” Billeter says. The key is to offer the assistance when consumers need it. Most help is offered at the time of purchase when customers are still overconfident in their abilities, but it isn’t until first usage that people typically become discouraged.

Lesson 4: Buy time with bundled pricing incentives

Technology is not the only sector that has an issue developing product loyalists. Sports and other experience industries lose customers because they quit before ever taking a ski or tennis lesson. “Introductory pricing should be set to encourage customers to continue with the product,” Billeter says. Discounted lessons or second-day lift tickets would entice a first-time skier to stick with it.

For more tips on how to build product loyalty, read the full article in the Winter 2011 issue of Marriott Alumni Magazine.