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The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

Aug 9, 2019

First off – welcome to episode 60! How exciting – I love hitting milestones and I am excited to celebrate this one with a fun episode on surprising and delighting customers and how that differs from satisfaction.

Last week we talked about the pain of paying and how it can impact the way people spend with you. It is quite possibly one of my favorite episodes to date – I really enjoyed digging through the research on that one, and I think the most telling study for you was the AOL example. 

Special Announcement: The first online course from The Brainy Business is going live on September 9, and there is a one week presale starting this coming Monday, August 12!

A lot of businesses are competing for your ideal customer. Plus, those same customers are becoming more selective and are more aware than ever of the many options they have. These days, it’s not enough to just get the job done or to do an ok job. If you really want to build true customer loyalty and customer engagement, you’ll need to surprise and delight your customers. This is how your business can build a loyal following and increase profits. In this episode I talk about how to do exactly that.


Show Notes:

  • [06:26] Many people assume there is a linear relationship between dissatisfaction, satisfaction and delight, but it doesn’t really work that way. Satisfaction is not the opposite of dissatisfaction, and vice a versa.
  • [07:08] The scale of customer experience actually goes from outrage, to dissatisfaction to satisfaction to delight.
  • [07:29] When you have a surprising positive experience, it results in delight. An unexpected, surprising negative experience? That is when outrage comes into play.
  • [08:25] In a business, you have to be aware of these all the time, including your overall experience for everyone as well as for each individual customer. Ideally, you are living in “satisfied” territory most of the time, with a few “delights” popping up here and there.
  • [08:57] Delight is much more likely to drive loyalty than mere satisfaction, and there is a lot of research that shows loyalty is positively linked to profits and stock market price.
  • [09:45] Once a customer becomes satisfied, they have achieved pretty much whatever level of loyalty they are going to have, but the loyalty score shoots up when delight is introduced.
  • [12:27] Delightful experiences are much more likely to hit the emotional center of the brain and be much more likely to be remembered. This also holds true for the mirror of delight which is outrage.
  • [13:23] One heavily cited study estimates that a 5% increase in loyalty from customers can increase profit anywhere from 25% to 85%!
  • [14:13] Delighted and loyal customers can have a lifetime value equal to 11 “regular” customers.
  • [14:31] Loyalty can also result in lower costs in advertising, branding and acquisition, as well as higher revenues per transaction or per customer, lower defection rates, plus an increase in brand equity.
  • [15:22] There's no standard scale for measuring delight. 
  • [17:08] Satisfaction is more of a cognitive process. Delight and outrage are more emotional.
  • [20:25] The reason the Ed Sheeran Edchup promotion works is because fans know that it's authentic. Consumers can’t be expected to let you know what will delight them, because at its core they can’t be expecting them.
  • [22:33] It's important to know your numbers, so you'll know in advance if the cost of delighting is worth it.
  • [23:06] The next pitfall is the peril of ever-changing expectations. If the delights become standard, customers will expect them. The key to delight is surprise.
  • [24:23] The last pitfall to be aware of is assuming that everyone has the same expectations.
  • [26:41] Often, simply being courteous, showing empathy, and making an effort to understand the needs of the customer are enough to create a delightful experience.
  • [29:41] Employee empowerment is still crucial in any business if you want to surprise and delight.
  • [33:08] You can also provide unanticipated value. You can also provide novelty and entertainment – think of Disneyland or Disney World.
  • [35:52] Reposition the business to focus on delivering solutions instead of products and services.
  • [39:18] Seven organizational changes from the Berman paper to consider so you can better deliver delight:
    • be aware of the need for organizational change to establish delight objectives;
    • link customer delight to bottom-line benefits;
    • look at world-class customer satisfaction criteria;
    • listen to customers to ascertain what's important;
    • empower employees so that they can go "the extra mile";
    • make measurement of customer delight and loyalty a priority; and
    • link raises and bonuses to customer satisfaction scores.
  • [41:30] Delight is not something you do one-off and hope for the best. It requires time and strategy.
  • [43:13] If you are sending gifts to your clients and customers, don't do it in November or December, because people are expecting gifts at that time.

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