5 Psychological Principles to Improve a Brand's Customer Experience

March 19, 2020

Know these five common psychological principles to better predict your customers and improve their experience with your brand.

Not that many years ago, a lot of companies still depended on their guts to try to engage with customers and potential clients. So, their strategies were mostly hypotheses they tried and tried, adjusting as they went.

In that scenario, some of the biggest decisions about the customer experience were made by people who didn’t give a second thought to them, from graphic designers to staffers of an outsourced IT company. Needless to say, doing that took precious time and led to some colossal failures.

Fortunately, those days are behind us. Given how much information we have available today, marketers can create more informed strategies out of the data and research.

Even when it seems like people behave unpredictably, there are some psychological principles that apply to most of us. The best thing about them? Businesses can use them to improve their customer experience. Here’s how.

5 Psychological Principles to Improve a Brand’s Customer Experience

  1. People don’t remember their entire experience, just the most memorable moments
  2. People tend to reciprocate
  3. People like choices — but not too many
  4. People prefer simplicity
  5. People act how other people act

1. People Don’t Remember Their Entire Experience, Just the Most Memorable Moments

We’d like to believe that we remember everything in detail, but we know that isn’t true. We only tend to remember the most memorable moments from different events, leaving out a considerable part of our actual experience.

Because we can’t remember everything, we tend to recall only the most emotional moments. We are more likely to remember things that have a higher emotional intensity and that happened more recently. These findings led Barbara Fredrickson and Daniel Kahneman to propose the peak-end rule to explain our memories.

The peak-end rule says we all value our experiences based on how we felt during their most emotional peaks and when they ended, regardless of whether we see them as good or bad experiences overall.

How to Create Positive Memories of Customer Experience

Because most customer journeys will have friction at some point, it’s best if it happens at the earliest possible time. In that way, playing nice music and having helpful staff can create an emotional peak.

Additionally, adding a small gift after a purchase can make up for the lost time in a long line or a bumpy checkout process.

For example, beauty subscription company Birchbox offers free gifts with purchase.

Birchbox free gift with purchase

The gifts leave a good impression of Birchbox and encourage customers to spend enough money to get a free item.

You want customers to remember positive things about you.

2. People Tend to Reciprocate

In his 1984 book "Influence: The Psychology of Persuasion," Robert Cialdini says that influence over people is based on 6 key principles:

  1. Reciprocity
  2. Consistency
  3. Social proof
  4. Liking
  5. Authority
  6. Scarcity

Let’s focus on the first one: reciprocity. A dictionary definition can help us understand what this concept means: “The practice of exchanging things with others for mutual benefit.”

What Cialdini explains in his now-classic book is that the mere act of giving away something creates some sort of obligation: The other feels compelled to repay in kind whatever we’ve given them in the first place.

This is the sort of principle that a lot of companies might use out of intuition. However, there’s research that proves that reciprocity, especially when used in marketing and customer experiences, can positively boost the quality of the engagement.

How to Use Reciprocity in Customer Experience

The most obvious way to use reciprocity in business is to give gifts.

Companies should do this often, not just after someone buys something. They should encourage sales by giving away a small gift for the first 100 visitors to their store, apply discounts to reward social media sharing, or give out resourceful content in exchange for an email address.

The best thing is that reciprocity can work with non-clients as well, eventually turning them into leads.

3. People Like Choices — But Not Too Many

We all love having choices — and the freedom to pick between them. Eat pizza or sushi? Watch Netflix or go out with friends? Get a dog or a cat? Paint the room blue or green? Choices bring spice to our lives and allow us to feel unique. That’s why it’s strange to learn that there’s such a thing as too many choices.

Most of us have experienced it: reading a pages-long menu in a restaurant, trying to order a coffee at Starbucks, picking a movie to watch. In those moments, it’s fairly normal to feel overwhelmed by the sheer amount of possibilities to the point where we can’t decide which choice is the best. That’s called choice overload.

That phenomenon happens when there are too many choices. Also known as overchoice, this has been linked to unhappiness, decision fatigue, choosing default options, or even not making a choice at all. In light of this, having choices can be good — but up to a certain point.

How to Offer the Right Number of Choices in Customer Experience

Companies need to balance the number of choices for the products and services they offer.

It’s not that you have to limit your catalog, but learning how to communicate your offerings is key. When a catalog is too detailed, it’s better to give some representative options and branch the choices out as the leads become more qualified.

4. People Prefer Simplicity

Common sayings such as “less is more” and “brevity is the soul of wit” are overused yet accurate. And they are true because we, as humans, are inclined naturally to the simpler things over more complicated ones. This bias is called the Simplicity Theory.

In the most basic of terms, the theory says that people are interested in things that are easy to them. For example, people will feel more inclined to read “The Da Vinci Code” over “Hamlet,” see an “Avengers” movie over “Parasite” or listen to Ariana Grande over Frank Zappa. They do so because those choices are less “challenging,” as they use a discourse people are already familiar with.

Following the Simplicity Theory, it’s safe to say that we tend to minimize our cognitive load. Hence, we pick the simpler things over more complicated ones. This doesn’t mean that complexity doesn’t have its own appeal, but when it comes to creating customer experiences, simplicity is always the best way to go.

How to Use Simplicity in Customer Experience

Every potential interaction a company can have with a customer should be as frictionless — and simple — as possible.

A website should have a spotless UX, payment processes should be as straightforward as possible, messages across different channels should use the simplest words possible, and customer complaints should be handled swiftly, efficiently, and in the shortest possible time.

5. People Act How Other People Act

Though it’s rare to see it today, the laugh track was a once staple of comedy TV shows. Networks added it to entice people to laugh or, at least, see the show as funnier than it might actually be. Cialdini uses it as an example of the last principle of this list: social proof.

Social proof is the psychological phenomenon for when people copy how others behave in ambiguous situations where they don’t know the appropriate behavior. The underlying assumption is that the people who are around us know more about the situation than us, so we play along because we think that’s the right thing to do.

From a standing ovation to fashion trends, social proof is in our daily lives even when we don’t notice it. In fact, marketers have been using it to increase leads and sales for quite some time.

How to Use Social Proof in Customer Experience

There’s a reason why more and more companies are putting out testimonial videos and using customer reviews on their sites — they are appealing to social proof to show their worth.

Roku TV, for example, created a testimonial video featuring real customers speaking about how easy setting up its product is.

Roku TV testimonial video

Having real customers talk about the product is more effective than having a company salesperson talk about it.

The same goes for marketing campaigns based on the recommendation of an expert or celebrity. Even social media posts about customer milestones are trying to show that many people are already doing business with a company and making everyone else feel left out and curious.

All of those are valid strategies modern businesses should use to leverage social proof.

Improve Your Customer Experience

Although it’s true that not all research or psychological principles can be applied linearly to customers or potential clients, they do offer some guidelines for what a company can expect. Knowing these principles and using them wisely in your business strategy can limit the guessing game and build strong foundations for any brand to grow.

This doesn’t mean that following these principles blindly will bring success to companies no matter what. You still need to create tests, experiment with them, and adjust your strategies as you go.

Creating business strategies with these principles will lead businesses to better predictions and better outcomes.