Tag Archives: personae

Behavioral Engineering and the Design of Influential Experiences: Example – Influencing Sustainable Behavior

Let me start this important topic with a few points that should be intuitively obvious:

  • The benefits associated with delivering an outstanding customer experience accrue from influencing customer behavior
  • Customers either deliberately or incidentally change what they do when they experience something that makes them feel or think differently
  • In most competitive markets, there are straightforward financial benefits associated with changing customer behavior. These positive changes in customer behavior lead to increased retention, wallet share, referral rates, etc…
  • The levers for changing customer behavior generally involve finding ways to understand and influence customers’ perceptions of the value they receive

Moving beyond these obvious points, things get much more interesting when the objective is design experiences that influence behavior towards more altruistic ends.  For example, many regulated utilities are launching energy conservation and demand response programs.  The objective of these programs is to shift customer behavior related to energy consumption and conservation.  While there might be marginal direct benefits (e.g., reduced rates, etc…) experienced by the customer as a result of changing their behavior, there are also environmental and social benefits the customer may not easily perceive.

As we’ve been engaged with clients working on this problem, it’s become clear that there’s a lot that any company can learn from this more challenging experience design problem.  For example, the airlines have done a good job of influencing customer behavior regarding online check-in and the use of kiosks rather than agents, despite initial customer tentativeness and resistance.

What Comes First:  Attitudes or Behavior?

While it seems natural to assume that customers’ beliefs and attitudes are precursors to their behavior, practical experience supported by numerous academic studies have demonstrated that the linkage is highly complex.  For example, many people have attitudes and beliefs consistent with environmental conservation yet do not exhibit any significant conservative behavior.  A person’s expressed beliefs and attitudes about environmental issues are not a strong indicator of how that person will act relative to those issues. In fact, you can’t even assume that a person who identifies themselves as an environmentalist will necessarily have either a solid understanding of the issues or be any more willing to modify their behavior to make it more environmentally friendly.

As discussed in Doug McKenzie-Mohr’s and William Smith’s book, “Fostering Sustainable Behavior,” a few illustrative examples include:

  • “Participants in an intensive 3 hour energy conservation workshop indicated greater awareness of energy issues, more appreciation for what could be done in their homes to reduce energy use, and a willingness to implement changes. However, based on follow up visits, actual behavior did not change. The only difference in behavior between participants and non-participants is that eight of the forty participants had installed the low-flow shower head they were given for free at the workshop.” Geller, E.S. “Evaluating Energy Conservation Programs: Is Verbal Report Enough?” Journal of Consumer Research, 8, 331-335
  • “Individuals who hold attitudes that are strongly supportive of energy conservation were found to be no more likely to conserve energy.” Archer, D., Pettigrew, T., Constanzo, M., Iritani, B., Walker, I. & White, L. “Energy Conservation and Public Policy: The Mediation of Individual Behavior” Energy Efficiency: Perspectives on Individual Behavior, 69-92.
  • “500 people were interviewed and asked about personal responsibility for picking up litter, 94% indicated that individuals have a responsibility for picking up litter. However, when leaving the interview, only 2% actually picked up the litter that had been “planted” by the researcher.” Bickman, L “Environmental Attitudes and Actions” Journal of Social Pscyhology, 87, 323-324.
  • “An investigation of the differences between recyclers and non-recyclers found that they did not differ in their attitudes towards recycling.” DeYoung, R. “Exploring the Difference Between Recyclers and Non-Recyclers: The Role of Information” Journal of Environmental Systems, 18, 341-351.

There are several factors that contribute to a disconnect between a person’s attitudes and their behavior.  Each of the following reasons influence whether or not a person engages in any new behavior, despite their attitudes towards that behavior:

  1. Lack of Knowledge. Inconsistency between a person’s expressed attitudes and their behavior might be partially attributable to a lack of understanding of what to do or a lack of understand the implications of their actions.  While numerous studies show that information or education alone has little or no effect on behavior, it is still a critical enabler.
  1. Perceived Barriers. External barriers and constraints set limits on what can be accomplished by just changing a person’s attitudes.  The higher the barriers, including expense, inconvenience, and technical difficulties, the less the effect attitudes will have on a person’s behavior.
  1. Perceived Benefits. A person may have to incur immediate and well-defined inconvenience, uncertainty, and monetary costs in exchange for longer term benefits experienced by the broader population rather than the individual themselves.  This is related to Hardin’s metaphor of the Tragedy of the Commons.

In general, behavior competes with behavior.  People consciously or automatically make choices between alternative behaviors.  When they do, people naturally gravitate to behaviors that have high perceived benefits and few perceived barriers or costs.  In general, people also naturally pay the most attention to short-term benefits and costs.  While perceived benefits and barriers / costs vary dramatically by individual, there are usually common elements shared by customers within a given customer “personae.”

As a result, a behavioral engineering approach is often most effective.  It is generally more cost effective to try to change behavior directly than to do so via a change in attitudes across a large population.  We have found that attitudes are just as likely to be a consequence of behavior than the cause of behavior. Or, as we like to say, you often “act your way into a new way of thinking, rather than thinking your way into a new way of acting.”

As McKenzie-Mohr and Smith summarize, much of the practice involves influencing behavior in specific ways by:

  • Increasing the customers’ perceived benefits of the desired behavior
  • Decreasing the customers’ perceived barriers to the desired behavior
  • Decreasing the customers’ perceived benefits of the current or competing behavior(s)
  • Increasing the customers’ perceived barriers of the current or competing behaviors(s)

The high level steps include:

  1. Identifying Specific Perceived Barriers and Benefits.  This requires field-based observation and elicitation research (See:  Observation and Elicitation: We Like to Watch!) focused on surfacing:  What makes the desired behavior difficult/easy?  What are the perceived positives and negatives?  Who wants you to do it and who doesn’t care?  This qualitative research is used to clearly identify the ways that  customers experience the barriers and benefits.
  2. Clustering Perceived Barriers and Benefits by Personae.  The initial observation and elicitation research is generally followed by a more quantitative study that clusters and prioritizes barriers and benefits for different customer personae.  (See:  Personae-Driven Customer Experience Design)
  3. Designing Behavior Change Programs by Personae.  In general, program design starts by targeting the most “influencable” personae first.  Characteristics of effective program design typically include the following elements (See:  Influential Experiences and the Psychology of Escalating Commitment):
    • “Easy to get started” initiating actions and reinforcement
    • Gaining visible commitment (e.g. written commitments)
    • Creating meaningful incentives and penalties
    • Emphasizing personal contact
    • Encouraging development social norms and leveraging social pressure
    • Designing prompts / reminders for new behaviors.  Helping people remember – making it difficult for them to forget.
    • Measuring and reporting progress against individual and community goals.
  4. Piloting and Refining Behavior Change Programs.  It is very important that any programs be tested and refined in the field.  This can be done with a sample or segment of customers.  The purpose of this pilot is not just to evaluate the design but to improve it with observation and feedback gained from the participating customers.
  5. Rollout and Evaluate Results.

Here are a few situation-specific lessons learned:

  • Efforts to encourage people to conserve energy must provide information that can help them understand what the effects of specific changes in behavior will be. For example, the information on a typical electric bill is not detailed enough. These bills typically summarize overall usages. This doesn’t give consumers any clue as to the relative effect of various resource-conserving actions. As a result, misconceptions about the impact of various actions persist despite educational efforts to change them (e.g., the impact of turning off lights vs. making less frequent use of the clothes dryer).
  • Providing incentives can be effective. However, if incentives are significant, many people come to believe they are acting only for the incentives. They may begin to require larger incentives to do things that they might previously have done only with small incentives. In these situations, the behaviors often stop as soon as the incentives are removed. In general, people tend to sustain changes in behavior when they have chosen those behaviors without the influence of significant incentives or penalties.
  • Attitudes about specific threats are more predictive of behavior related to those threats than general concerns about the environment are predictive of general environmentally friendly behavior. For example, attitudes towards recycling are more predictive of recycling behavior than are general concern about the environment.
  • Stronger commitments yield more persistent behavior. A commitment accompanied by an agreement to promote target behavior among neighbors has more behavioral influence than just the expression of commitment by itself. Encouraging customers to commit to a more specific goal is more effective than more general goals to conserve energy.
  • Aligning consequences to behavior is critical. For example, having customers pay for trash pickup based on the amount of trash they produce is more effective than impassioned pleas to reduce trash.
  • While publishing typical customer behaviors can generate peer pressure, it is a double edged sword. It can encourage people who are already doing both better and worse than average regress to the norm. Publishing exemplary behavior is an alternative to publishing average behavior.

This is a topic we’ll continue to explore as we progress in our work with utilities on the design of more influential programs and experiences.


Wesabe: A Collaborative, Next Gen Financial Experience

I’ve spent a lot of time working with a handful of leading financial services organizations on the design of their customer experience.  One of the biggest challenges is that executives at these organizations have a natural tendency to think about the business in terms of the traditional industry boundaries.  In a recent post, I talked about a customer-personae driven experience design approach that starts by considering the broader set of needs that different kinds of customers have… how they make money, how they spend money, how they save and invest, etc…   This post referenced a couple of innovative banks:  Umpqua and AMPLIFY.

Another very interesting example is Wesabe, a social networking platform for people dealing with financial problems that has gotten very significant positive press.

From their website:

“We want to help you get rid of credit card debt and start saving for college for your kids. We are tired of getting stung by stupid fees from banks and credit cards. We believe pooling information on where we all spend can help you make better financial decisions and ultimately take control of your money to reach financial goals.

Founded in December 2005, Wesabe is in San Francisco, California. Our easy-to-use, Web-based software gives members a better understanding of how they spend money. The Wesabe community shares tips and advice to help each other make better financial decisions. If you have questions, don’t hesitate to talk to Jason, our ceo.”

What I find striking is that an innovative bank could really be offering something like this… designed around the needs of a significant cross-section of customers.   This would involve balancing the tension that might result from proactively helping customers avoid the kind of bank charges that tend to accumulate with customers that are persistently or temporarily living on the edge.

I sat next to a gentleman on my flight home the other night.  He is a biomedical engineer working for an innovative cardiac device company.  He told me the story of his experience with insufficient funds situations while finishing college a few years earlier.  Obviously the situation has changed… but his memory of how a particular bank “mistreated” him lives on.   Today he’s the kind of customer that would be the ideal mass affluent prospect.

Based on our research, there is a significant portion of the population that, due to a combination of their situation or their behavior, have respectable income but little or no financial assets.  These are high potential customers with needs that go beyond the services offered by the traditional bank.  The opportunity for a differentiated, out of the box customer experience design is enormous.

Personae-Driven Experience Design in Retail Financial Services

Over the years, we’ve had the opportunity to work with several leading retail financial institutions on a personae-driven approach to customer experience design.  The challenge is that most banks, insurance companies, and investment advisory businesses have a long legacy of product-centric, “everything for everybody” ways of thinking.  This leads to decision-making and resource commitments that reinforce “better sameness” rather than true differentiation.

Financial personae are used to describe a holistic picture of how specific individuals think about and behave with their money.   A financial persona includes how an individual thinks about making money, spending money, saving and investing money, donating money, etc…    This insight can be used to design highly differentiated experiences that are attractive and engaging for particular types of customers while ensuring that the experience still works well across the full range of customers in the population.  (See Personae-Driven Customer Experience Design for more background).

There are several niche retail financial services organizations that are leveraging deeper customer insight and an out-of-the-box mindset in order to redefine the customer experience.  For example:

  • Umpqua Bank. With 146 “store” locations in Oregon and California, this growth-oriented retail services organization has been recognized by the Wall Street Journal, NY Times, Business Week, Fast Company, and CNBC for their innovative customer experience.  Their branch design is part upscale hotel, part retailer.  One of the things that is highly distinctive is Umpqua’s productized “banking blends” targeted at individual consumer and small business preferences.  For example, one of these banking blends, called “Club Carefree 50,” is geared toward people 50 or better with benefits such as travel discounts, The World’s Greatest Reads Book Club, Club Carefree 50 Community Connection Corps, and Health and Wellness programs.  Umpqua has a highly professional approach to service with the branch managers and staff cross-trained as “Universal Associates” responsible for delivering “Ritz-level” service. They have appeared 34th on Fortune’s 2007 list of “100 Best Companies To Work For.”  Since 2001, Umpqua’s organic loan and deposit growth has run 39% and 37% respectively.
  • AMPLIFY. This Austin TX based credit union has a goal to provide more innovative, simple choices that help customers achieve more.  There are no teller windows or cubicles.  AMPLIFY branches have café style seating, wireless internet, gourmet coffee, music.  Employees use wireless table PCs, so they can sit down with customers.  Employees line up for customers rather than the other way around.  AMPLIFY provides online and mobile banking options. In addition to its own branches, AMPLIFY leverages a network of “shared branches” locally and nationwide.  AMPLIFY provides financial workshops in their branches and articles and educational information on their website.

There is a fundamental difference between having an “identity” and having “personality.”  An identity gets you recognized; a personality makes you attractive.  American Airlines has an identity; Virgin Atlantic has personality.  Ford has an identity; BMW has personality.  These two banks have personality.  That personality is driven by delivering an experience that is highly differentiated and focused on addressing the emotional and rational needs of one or more target customer personae.

The Emergence of an Individual’s Financial Persona

Each individual’s financial persona is shaped by a wide range of factors that are deeply imprinted on their perceptions, interpretations, evaluations, and behavior with money.  One important factor is an individuals’ earliest and most influential childhood experiences with money; how they watched their parents worry about, argue about, and celebrate over money.  This is influenced by the family’s financial situation and whether one or both of their parents had dysfunctional financial attitudes or behaviors.  It is also influenced by whether they really understood what went into making money rather than feeling that it just “appeared.”  Another factor is the way each individual interacted with their parents and siblings on anything even remotely associated with money.  Did they get what they wanted? Was money used as a reward or punishment?  Did they get an allowance and was it enough or was it more/less than their friends got?  Were they encouraged or forced to save?

An individual’s financial persona tends to be relatively stable over time.  While an individual’s beliefs and short-term priorities may change based on their experiences, maturation, and financial situation, we’ve found that foundational elements of an individual’s financial character tend to persist over their lifetime.  As a result, this personae-driven approach complements rather than replaces the demographic or life-stage segmentation work that many retail financial institutions have done.  A customer with a given persona will progress through their life stages in a way that is fundamentally different than a customer with a fundamentally different persona.  (See:  What is the Difference Between Personae and Segmentation?).

Getting to the Bottom of Individual Financial Characteristics and Profiles

One of our starting places for constructing financial personae was Your Money Personality, by Katherine Gurney.  In this book, Gurney outlines 13 important characteristics that describe an individuals’ relationship to money.  This includes: their level of involvement in actively managing their money and reflectivity in considering past decisions; the degree to which emotionality drives decisions to spend or save; their comfort with risk taking; their balance between spending, saving, and altruism; the extent to which the desire for power drives their financial decisions; the level of anxiety they feel about financial decisions; the extent to which the individual associates their work ethic with financial success; their degree of pride about how they’ve handled their money and contentment with their financial situation; their level of self-determination ranging from believing their financial situation is due to their decisions versus luck; and the extent to which they trust others involvement in financial decisions.

Gurney goes on to define nine psychographic profiles that build on these characteristics.  These profiles create a solid foundation for developing situation-specific financial personae.  These nine profiles are:

  • Money Masters. Experience contentment and security derived from money. They are the No. 1 wealth accumulators even though they don’t necessarily earn the most. They have the highest level of involvement with their money. They trust the recommendations of others and act on sound advice. Their philosophy is “success through determination rather than luck.”
  • Achievers. The second-highest income earners, usually college graduates and mostly married. They feel work, diligence, and effort pay off. They’re proud of their achievements. They tend to distrust others’ honesty with money. They are conservative and generally not interested in risking assets they’ve worked hard to accumulate. Protection is a primary consideration. Being take-charge types, they are highly involved and reflective on financial decisions.
  • Entrepreneurs. The most male-dominated profile, driven by passion for excellence and commitment to achieve goals. They are the highest income earners but not workaholics motivated by money alone (a scorecard to measure achievements). They enjoy the power and prestige that money brings. They are proud and reward themselves with the best cars, homes, wines, etc. Investing in the stock market is their favored strategy.
  • Hunters. These individuals are usually highly educated, with a live-for-today financial style. Hunters are more frequently women who make purchasing decisions with their hearts, not their heads. Hunters use impulsive spending to reward themselves. They have a strong work ethic, like the Entrepreneurs, but lack confidence. They attribute success to luck rather than ability and judgment. If they understand their traits, they can make dramatic progress.
  • Producers. These individuals rank high in work ethic but lower in assets due to lack of confidence in money management. This leads to real frustrations: they work hard, desire more but feel the difficulty of getting ahead financially. Financial education important since these individuals need help understanding how money system works. They do not evaluate risks carefully and rarely profit from them. They lack confidence in making financial decisions.
  • Optimists. Money has brought these people peace of mind. They have the fewest anxieties and tend to be proud and content. These individuals are the least reflective, and money decisions are somewhat impulsive. Often in or near retirement, they’re more interested in enjoying their money than making it grow. They are not highly involved with their money, taxes or investments, which might cause stress
  • High Rollers. To these individuals, money presents infinite possibilities. They’re thrill seekers. They enjoy risk but are only mildly interested in where it takes them. They seek power and recognition that money brings them. These individuals tend to be creative, extroverted, and competitive. They work and play hard. Money is an emotional release. They prefer to risk assets rather than sit bored by financial security. If they don’t learn to manage their styles, they can end up with low pride and contentment.
  • Perfectionists. They are so afraid of making a mistake they often avoid making a decision. They will continue to try harder, but lack self-esteem, especially about money. These individuals have the least pride in handling financial matters. They have tunnel vision, consider every angle, and find fault with practically any risky venture. Finding suitable investments is difficult for them .
  • Safety Players. They are the lowest in self determination. Most of their money goes into safe and secure investments. They lack confidence and motivation to reap more growth by taking more calculated risk (even though they are well educated). These individuals take the path of least resistance, feel they’re doing fine, and repeat whatever investment strategies worked for them before.

Applying This Insight

We’ve found that each business situation (e.g., retail banking, insurance, wealth management, etc…) can leverage different personae that build on the characteristics and profiles.  For example, a personae-driven design approach in retail banking could start with the following observations:

  • Retail banks are often not the primary place where the highest involvement and highest reflectivity customers “shop.” In Gurney’s model, these are the Money Masters and Achievers. We’ve found that these high involvement and reflectivity customers often access traditional banking services from non-bank providers, such as using checking associated with their brokerage account.
  • The lowest involvement and lowest reflectivity customers may be in the sweet spot for a bank but, since they are not “switchers,” they’re generally not good targets for optimizing the design of the experience. In Gurney’s model, these are the Perfectionists and Safety Players.
  • This leaves several “swing” profiles that can be targeted with highly differentiated experience designs:
    • Entrepreneurs. An experience design focused on these customers might emphasize the tight integration of personal and small business finances.
    • Hunters & Producers. These high work ethic customers have income but limited assets. They’re disappointed about their financial position, but have high potential. A differentiated experience design might emphasize financial planning, more incentivized savings, and financial education. Hunters many need help breaking the cycle of emotional spending. There are a couple of examples of retail financial services organizations that have done a good job of being attractive to these customers: ING with it’s push around http://www.ihatefinancialplanning.com/ several years ago and, more recently, Ameriprise with the promotion of it’s Dream Book.
    • Optimists. Umpqua Bank offers a productized “banking blend” called Club Carefree 50 that incorporates travel discounts, social networking, a reading club, and several other non-banking services in a way that seems to really fit these customers’ priorities for using money as a means of enjoying their lives.

The most creative of the banking organizations with begin to play a broader role in their customers’ financial lives.  This requires thinking about customers’ experiences well beyond the traditional banking touch points.  We’ve found that the most important insight that companies need in order to identify ways to redefine the customer experience occurs at the non-touchpoints.  (See:  The Customer Experience Does Not Happen at Your Touchpoints).  As such, there are significant opportunities for retail banking organizations to facilitate experiences that go beyond the basic touchpoints.   For example, this might include a broader, facilitative role in how customers spend money.   For example, providing financial education, arranging discounts and privileged access to local service business (who are also potentially small business or middle market clients of the bank), providing alternative means of paying for goods and services via micro-loans, and facilitating fractional or short term ownership / leasing of things.

We are continuing to refine our understanding of the beliefs, emotional reactions, and behaviors associated with different financial personae.   This area is ripe for continued sophistication.  Understanding target personae provides a vehicle for thinking more concretely about the design of a differentiated experience.  In addition, understanding the different personae that exist across the population provides insight into how to design more whole-brained and effective customer communications.

What is the Difference Between Personae and Segmentation?

For the past several years, we’ve followed a personae-driven approach to customer experience design.  This approach has been critically important as we work with our clients to design experiences that naturally fit with… and influence… the “mental model of the customer.”   (See: Personae-Driven Customer Experience Design)

With virtually every client, we get questions about how personae (plural of persona) compares to segmentation.  In short, the development of customer personae complements rather than replaces segmentation.  The two tools are:  used for different problems; incorporate different information; and are derived using different methods.

Here are a few highlights of the differences:

  • Personae are used for designing experiences that get the customers’ attention, fit with the way they think about what they’re trying to accomplish, and map easily onto their natural set of behaviors…  segments are used for making strategic focus and prospect targeting decisions – based on the attractiveness and accessibility of different types of customers.
  • A persona is a vivid description of a single archetypical customer… a segment is an abstract group of customers that share certain characteristics.
  • A persona includes a rich description of how that specific customer thinks, acts, and experiences the world…  a segment typically includes descriptive or situational information about the group of customers.
  • A small set of personae can be used to illustrate the fundamentally different types of customers that exist in the marketplace…  segmentation is used to create a comprehensive mutually exclusive, collectively exhaustive (MECE) representation of an entire marketplace.
  • Personae are qualitatively derived based on observation and in-depth elicitation interviews…  segments are quantitatively derived from large samples including demographics, situations, behaviors, and attitudes.

Hope that helps…

Personae-Driven Customer Experience Design

A persona is a fictitious person created for the purpose of helping designers and decision makers understand how people actually experience their interactions with a product, service, or organization.  The use of personae was popularized by Alan Cooper in the book “The Inmates are Running the Asylum.”  In this critique of the software development industry, Cooper recommends the use of personae to help developers get a practical, visceral feel for the ways users think and behave. Since that time, the use of personae has become very popular in a wide variety of product and user interface design applications.  Personae are given a name (Bob, Sue, etc…) and a set of richly described characteristics, situations, goals, pain points, and behaviors that are relevant to the design.  For any given application, there are usually a relatively small set of personae that characterize the range of users or customers.  Cooper has suggested that one persona is usually sufficient.

The  benefits of personae in understanding and designing distinctive customer experiences are substantial.  Typically executive leaders and functional managers do not have a clear and concrete understanding of how their customers experience the world and, more specifically, their interactions with the client’s organization.   Personae are powerful because they put a specific human face on often abstract customer information.  In this way, they are fundamentally different than customer or market segments, which are generally shared characteristics of categories of customers.  This “human face” makes it easier to make decisions and design tradeoffs with an understanding of how what you do either fits or doesn’t fit for the customer.

One of the best examples of using personae for customer experience design is Best Buy, who made substantial changes to their store design, merchandise assortment, training, etc… based on the definition four customer personae.  In particular, they started to shift elements of  the experience design to work for the persona they called Jill.   Jill is a soccer mom that does most of the shopping for her family but is intimidated by electronics stores.

Unfortunately, the way most organizations develop personae appears to be very loose; more of an art than a science.  The generally accepted best practice is that personae should be based on solid ethnographic research with customers.  However, sometimes persona are just made up based on what the team thinks they know about customers (because they know so much about them already!).  Assuming research is done, the process of turning research findings into personae is also very loose.  Typically, common themes across customers are identified and clustered in a creative process that generates a plausible enough set of personae.   In addition, details are usually added to these personae in a way that “rounds them out” and makes them more believable.

Over the past couple of years, we’ve been trying to address the lack of rigor in personae development.  Our starting place for this was our emphasis on designing from “mental model of the customer” rather than the “mental model of the company.”  Not only does this perspective address the same basic objective as customer personae but the idea of defining personae precisely based on elements of a mental model is appealing.  It also provides a means of deciding how many personae are needed since the only reason to have different personae would be because there were relevant and substantial differences in the mental models of two different types of customer.

Our working definition of Cognitive Customer Personae include models that capture:  what the customer is trying to accomplish; the end-to-end behaviors the customer typically performs to accomplish those things; a structure of beliefs and temperamental characteristics that drive their rational and emotional reactions to their experience.  Each one of these personae is described by four models that are described in more detail with a few examples in the post titled:   Cognitive Ergonomics:  Designing Customer Experiences that Fit with Customers’ Mental Model.