This page has the full written transcript of Richard Sedley's session.
You can also download the audio recording and the presentation from Richard's presentation summary page.
Both the podcast recording and transcript have been slightly edited for clarity.
Transcript
RICHARD SEDLEY:
I'm Richard Sedley, director of the cScape Customer Engagement Unit. This edition of the cScape podcast was recorded at the cScape-organised and Microsoft-sponsored 'From User Experience to Customer Engagement' thought leadership event. This is a recording of my presentation on the important role that the science of persuasion can play in an online customer engagement strategy.
To download the accompanying visuals and a written summary, visit the cScape website at www.cscape.com. You can also find additional podcasts and articles there. And if you are interested in some of the issues I raise during my presentation visit my blog at www.richardsedley.com
RICHARD SEDLEY
I’m going to break my presentation down into 3 simple parts. The first part is going to look at customer engagement. I’m going to cover a lot of the ground that Rob has already gone over in the introduction and try and dig down a little bit deeper. Customer engagement is not a new thing, so why now? What is different about it now? And what can we take advantage of now? Secondly I want to look at the role of persuasion in customer engagement. Persuasion probably has received a lot of bad press recently, not least because in the context of advertising and marketing people think that you are kind of sneaking up behind them and that you are trying to get people to do things that they didn’t really want to do, but they are doing by surreptitious means. So I’ll talk you through that, because I think persuasion is pretty much at the heart of everything we do at the moment. Then the last bit is a practical 10 tips for online Persuasion.
It’s a pretty bold statement that we put up at the front that the next 3 years are going to be key for customer engagement for pretty much everyone here in the audience. What I am going to look at now is what has changed to make this true. Another point Rob made at the start was that you might not have an organisation in five years if you don’t do it so you really have to recognize it is quite a powerful statement. So what has changed and what is the significance of Customer Engagement?
Firstly the market has changed, even if you and your customer haven’t changed. It is tough out there – many more opportunities but within these opportunities they are tougher. I will start with a few statistics to prove what I am saying about the market place is true. For example, if you knew what your conversion rate for your site was you would know that in 2002 conversion rates were around 3.2. That is pretty low actually, for example if you ran a newsagents and your conversion rate was 3.2 you would be pretty worried. By the time we get to 2005 that figure has dropped to 2.4. So, if your online conversion rates are greater than 2.4 at the moment you are probably bucking the trend. Other things have changed too. For example, in 2003 the number of sites that people regularly visited was around 11 but when you get to 2005 that figure has dropped to 7. We are actually closing down the number of regular sites visiting. Again, you can understand in that context the market is getting tougher. Time and again research has revealed that satisfaction, which we used to put a lot of weight on as a concept, but recent research shows that 60-70% of people who say that they are satisfied or very satisfied with an organisation switched within 7 months, which shows that satisfaction is not an indicator of loyalty. And if satisfaction is not an indicator of loyalty what is? Customer engagement is about building loyalty to you and ensure that you can take advantage of them over the long run.
So, the market has changed but was else has changed? Secondly, your customers have changed. I bet that there isn’t one of you that works online in the way they used to. I know that when I used to work with a 56k modem and everything was much slower, I worked in a much more linear way, but how many of you know spend one hour on one thing? I certainly do not, I would say that I am pushed to spend 15 minutes on one project without being interrupted or changing or doing other things at the same time. The truth is that we are living in the most information rich, stimulating attention demanding world that humanity has ever known. This is taking a toll on us and our customers. The rise of multi-tasking is the real ages phenomenon. This is very new and used to be attributed to women but now, in the age of sexual equality, we can all do it. The consequence of doing many things is that our attention on any one thing has decreased.
All of this has come together and led to three important things I want to stress in the need for customer engagement
- Wilfing is a term coined by moneysupermarket.com. They did a survey of over 2,000 adults this year to see what makes people navigate around. While the number of websites we visit regularly has declined, we are actually seeing more websites now than we have ever seen. We’re going around, bouncing around different websites looking at bits of them and moving on. The idea of ‘what was I looking for? I’ve completely forgotten I was sidetracked by other things.’ From an employer’s perspective this is a bad thing as if your workforce are looking around different websites they are not doing the work that they should be doing. But if you flip that around and think about your own website you are looking at the number of people that are visiting your website and think it’s great my stats are increasing, increasing and it’s great, but the reality is that if they are wilfing, they are bouncing around different sites what benefit is that to you? You think that it is a positive thing but it could actually be a negative thing, it could actually be a double negative thing as if you are spending money on search marketing, site optimization, Google ads they are coming across your website and then moving on, so they are visiting your website and costing you money and then they are off somewhere else. We can use customer engagement to circumvent this.
- The second thing is decisional heuristics. What this information saturated, stimulating age means is that we don’t have the time to think ‘is that worth my time or isn’t it’, ‘does this work for me or doesn’t it?’ What happens is I end up taking decisional heuristics where I use other things to decide if something is worth my time or not, for example, the visuals of the site. Does it look right? Visual impact and the look of something is probably the strongest thing linked to credibility that you are going to be able to get onsite. It is sleight again but it is true; time and again research has proved this. So the look and feel, brand, recommendations – these are sorts of things that are going to be more and more important in a time where we don’t have the ability to make those decisions as to whether something is really worth our time or not.
- Lastly and in one respect it’s the least important in terms of our immediate short term how we are going to engage with this but it’s probably the most important in terms of where we are going to be in the next 10, 20 years. I was at an academic conference in the States about 3 weeks ago and this came up as an example. There is this test and the idea is that you are supposed to read the colour as you go across. Continually for the last 150 years when people have done this test people who are seriously academically slow and people who have mental disabilities can read this faster because they are not distracted by the disconnection between the text and the colour. What is happening now, this is research from the last 8 months, is that we are noticing, because of the environment we live in, that people are reading this faster in recent years. We are now on a plane with the people that are mentally disadvantaged in the way that we are reading this stuff. What the age is doing is interacting with us and changing the way we understand and the way we are physically and mentally engaging with the world.
Rob picked on distributed user experience (DUX). The way we communicate and undertake tasks is essentially what is called multi-nodal now. It’s quite rare to experience or do anything without interacting with any number of these particular items. If we take personal relationships as an example, in the 18th century they would be face to face or by letter. Most of the 20th century it would have been face to face, letter and telephone. In the 21st we have face-to-face, mobile, email, instant messaging, social network, avatar, the list goes on and on. Even the experience of football is different now. It’s no longer you go on a Saturday to the ground and watch a game. Nowadays you go to the match, you text at half time to see if you can win that signed football shirt, you go back home plug into your Sky box to check whether that referee really did whistle at the right point or not, you then communicate online about that with your mates. The whole experience of what football is now, is no longer just sitting in a stand. It is entirely mediated through this multi touch-point, multi-nodal, distributed experience. And this is something very important customer engagement understands and relates to.
Having a cake and eating it – Rob touched on the possibilities opened to us by broadband . Research published last year suggests that it takes half a second for a user to establish the credibility of a website. When we did some work on this about three years ago we thought it was 3 to 4 seconds. What is worse than that it takes 4 seconds to establish value. So, if you cannot establish credibility within half a second and value to someone within four seconds then the likelihood of them skipping somewhere else is very-very high. So customer expectations have increased.
Improved interactivity – This is a lot of what the Web 2.0 stuff is about. Ian highlighted some of the best interfaces which show that there are many ways to do this. We are increasingly seeing the big players taking the richer interfaces a lot more seriously. In the last four months for instance I’ve met the Microsoft Customer Experience evangelist three times. That’s never happened before. Suddenly there is a big wave of recognition that the interactive experience is one of the defining features of the next generation web.
The significance of customer engagement – I think it was Rob hinting at this that businesses are about relationships now. Ian certainly talked about the conversation. I’d go beyond the conversation. I think the conversation is the precursor to the date, is the precursor to the relationship. And that is the direction you really want to try and take things. An engaged relationship is really the only guarantee you have of future performance. Without an engaged relationship the only thing you end up by doing is going into a whole cycle of acquisition. It’s the old make sure your bucket is sealed before you start to fill it properly. And of course this works in terms of both employee and customer engagement. People are often talking about employee and customer engagement as a kind of backlash to the schizophrenic nineties and the kind of short termism of the eighties and the difficulty in understanding that in that kind of way is you think it is just a reaction to what has happened previously whereas actually customer and employee engagement are essential to the circumstances we are in at the moment. If you don’t understand it in those kinds of terms then you won’t understand the significance of what it is highlighting.
Customer engagement puts digital at the centre of any of this multi-channel distributed experience. My colleague Dave Chaffey has coined the term ‘right touching.’ Right touching is about the recognition that there are different people that you are talking to. You can’t treat your customers as any one group. And what right touching really means is being able to provide the right experience, the right service, the right delivery all in the right time frame and in the right context. How do you do that? The digital medium provides you with the flexibility to right touch in a way we have never been able to do before.
We often hear ‘I can’t get involved in customer engagement because I haven’t got my search sorted out’ but actually customer engagement is not a set of stepping stones you have to follow one after the other like a linear process. We have this endless debate about how to pose customer engagement. Rob says it is like a philosophical approach which is half-way there. Actually it is a business approach as well. Above all it is a way of applying an understanding of your audience and the requirements that you have across the spectrum. If you understand it in this kind of way then you also recognise that it doesn’t matter what technology you have it doesn’t matter what stage you are in acquisition, it doesn’t matter whether you’ve built it whether you haven’t built it, whether you’ve got your search right whether you haven’t got your search right all of those sorts of things don’t matter. If you apply this approach to whatever it is you are developing then those back end systems, that search, that navigation, whatever – it is that you are worried about will take on a whole new life. The other aspect of customer engagement as a kind of business philosophy is also recognizing the importance of short term wins because that is how you communicate things back up to your organisation.
Moving on to the second section; how can you differentiate yourself? We’ve got a really good cross section of people here in the audience from Amnesty to T-mobile from Centrica to the Chartered Institute of Journalists. As a group you can definitely differentiate yourselves via what you do. But I think in terms of the online environment it often is quite difficult to differentiate yourself and that’s where I think that the art and science of persuasion becomes very important.
The goal of Persuasion. Its changing someone’s attitude or behaviour. I can’t Believe that that doesn’t match everyone goal’s on their website. Whether its to buy something, which is the behaviour, or to get people smarter as is the case with Eileen’s membership organisation. The idea is to take someone from where they are, change them and make them better. In that respect persuasion is a simple concept.
In terms of the web and in terms of customer engagement, I always say persuasion is the grease between acquisition, conversion and retention. So when you make your website useful, you can make it usable or timely but there is still no guarantee that it will actually get used. Persuasion is about using psychology in order to motivate people to engage with you. Beyond useful, beyond usable, beyond user experience is customer engagement.
The four corners of Persuasion. I’ve mentioned credibility before. Ill look at the principles of motivation – what gets people working. A cScape defined concept called Persuasion Windows. Persuasion is a dialogue in the context of web 2.0. When someone comes to a website they will have pre-established assumptions in most cases. Simple inspection we have talked about before. First impressions definitely count. Certainly in terms of acquisition. Reputed credibility: What other people might say. If you can earn high amounts of credibility then you start to build reputation and customer advocates. Let me give you an example. The Marketing experiments Journal did some research on a security website called Net Detective. All they did is they changed the look and feel, they gave it a crest and a few images and things like that. The first version had a conversion rate of 2.6. The second version had a conversion rate of 3. Simply by redesigning with the aim of credibility had a projected monthly gain of over 30 thousand dollars.
Lets look at the principles of motivation. Robert Cialdini wrote a book balled ‘Influence: The psychology of persuasion’ in which he reduces 60 different persuasion strategies and distils them into six particular principles. People are motivated when they feel they owe you something. That’s Reciprocity. Let me give you two examples from two US studies. There was series of a couple hundred doctors that a particular pharmaceutical company wanted to send out a survey to. In order to encourage them to fill it out they sent to 50% of the doctors the survey with a letter saying ‘if you complete this survey we will send you a 50$ cheque.’ The second 50% of these doctors they sent a 50 dollar cheque to and the survey. The first 50 % of the doctors had a 68 % return rate on that survey. The second group saw an 85% return. What was interesting was that 15% from the second group didn’t cash the cheque. If you feel you owe someone something the more likely you are to undertake an action. That’s the principle of reciprocity. Another example in the context of a website. There was an information based website, this is again a piece of research done in the past six months, that wanted to encourage newsletter signup which I think pretty much everyone here wants to encourage on their site and they used a particular report as an incentive. When they placed the signup form before the free report that they were giving out they got a 35% completion rate on that sign up form. When they placed the report in front of the sign up form they got a 28%. So they got less. However, those people that completed the report in the latter example had a 100% accuracy on completion those people that completed the form in order to get the report had around a 60% accuracy rate. So you can see that even though they have lower numbers the data was a lot more useful for them. I’m not going to go into all of these here. I will only discuss scarcity also. I presume that everyone is familiar with the fact that yesterday the Cutty Sark burned. Tragedy. Now I bet that if you knew it was going to burn yesterday you would have gone last weekend to visit it. The fact that it was no longer going to be around means that you would have gone to see it. Concorde flew three times every week from Heathrow airport and yet no one turned up to visit it. On its last flight the M4 was blocked for thirty miles in both directions in order to catch this last flight. The power of scarcity, the power of loss is much stronger than the concept of gain.
This is a picture of my daughter Marie Ann. I want to use her to illustrate the concept of a persuasion window. My daughter goes to a nursery, nothing too grand, but she likes it, the people there are really nice. The main problem we’ve got is that it’s down this little alleyway and there is this fat chain mail fence right at the back of it and it’s kind of a nowhere street. So, what happens is that anyone who wants to dump anything comes in and they dump their rubbish at the back. Bin bags, old washing machines – pretty much anything. What the nursery have done is put up a sign saying ‘Please do not dump your rubbish there’. As you would expect this had no effect. So they put up this other sign saying ‘Do not dump your rubbish there, children play in this area’. This had no effect at all either. So they changed the sign and put another which said ‘Do not put your rubbish here or we will prosecute you’. Absolutely no effect. So what we did, we put up a sign ‘how to get to the dump’. That went up on a Thursday I went back on a Sunday in order to remove the binbags that have been put there and they were gone. And I can only presume that someone went to dump something and thought ‘Oh the dump is there, I’ll take those bags with me as well’. What you had – and this is what I mean by a persuasion window – it was at the right time, when someone was going to dump something, at the right place, where someone was going to dump something, and it coincided with making both sides have an advantage, both parties felt good about themselves at that particular point. What you saw was the opening of a persuasion window where you are able to have someone do whatever you want them to do, not because you are tricking them, not because you are making them feel stupid or bad but actually because you are doing something which is in their interest at that particular point. The difficulty with persuasion windows is that you don’t often know what is going to happen. You can do some research, you can work out at what particular point they may open. Here we knew that this would be a very good place in order to open a persuasion window. Certainly better than when you look at all these local papers and they tell you where the dump is. When you open a local paper do you need to dump something? Probably not.
So how do you open those persuasion windows? These are some tips on what it is that opens a persuasion window for you. When you are in a good mood. When people are in a good mood they are more likely to do what you are after. When their worldview no longer makes sense. When you can take action immediately. When you feel indebted because of a favour. Immediately after a mistake; immediately after you’ve been denied a request. If you have particular areas of your site where you can’t get access because it is member-only premium content there you have an opportunity. A persuasion window is opened at the point of denying the user something. So provide them with some alternatives. The thing about persuasion windows is that they open and they close. If you don’t take advantage of it then, then you’ve lost that moment.
Persuasion as a dialogue is another concept we are developing at cScape. I’m a firm believer in being able to understand that the process of changing something also changes yourself because you are interacting with it. What persuasion in this context allows you to do, is to say that ‘well if I am able to persuade my punters to do something, then what is it about that process that they do that can end up by changing me and making my service better for them’. There is this circular approach to persuasion. We can understand Web 2.0, UGC, customer interaction with companies, their selection of products, as the ability to feedback into the way that you service them. Quick example. A swiki is a search-wiki. A search results page which any punter can edit by voting on the relevance of results. A lot of search tools really make a point of being able to say ‘we can do all this automatically in the background’. If people aren’t clicking on it then we’ll assume its not relevant and then will push it around. But actually what that doesn’t do is:
- Give you the sort of control you can ultimately have by realizing what people are voting for, but also
- It doesn’t give the customer that feeling that they are getting involved with something, that they are helping to shape the product.
Ultimately what happens is that the customer ends up making your search results better for you and feeling good about it as well.
10 tips for online persuasion. These are nitty-gritty dirty type examples you can hopefully get something out of. Are your headlines failing? 3 examples of headlines: ‘Engage your audience’. ‘Do you want to engage your audience?’. Questions are very good because they tickle that part of your brain and stimulate a little bit extra. That is the reason the second is better than the first. The third is ‘Are you failing to engage your best customers?’ Making sure that is something that is relevant. Your audience, yeah, ok, but your best customers. Also it is this idea of creating a problem for people in the context of a question. The third version is three times as good in terms of click-through rates. This displays a use of psychology and knowledge of human behaviour in order to persuade your customers to click on what it is you want them to click on.
Social Proof. Coming back to what I was saying before about decisional heuristics. We are in an age where there is so much going on that people don’t have the ability to make rational decisions any more even when they buy products. One of the things that can really help with that is being able to see what other people think of a product, service or information. The thing about testimonials is that everyone can make it up as well. Use multiple testimonials. It’s very rare to see more than three in any one context. But actually the impact of twenty is significantly more than the impact of three. Because it makes someone think ‘If all those people think it is an entirely positive experience, entirely useful piece of information, there must be something good about it’, so my decisional heuristics will click into place and tell me this is something I should be interested in.
My wife often tells me about the last Stone Roses gig she went to. She thought it was great. And the reason why it was so great was because it was the last. If you push her she’ll actually say it wasn’t that great. But it becomes a special event afterwards. She only realized how special it was after the event. What we can do is make people feel proud about what it is they are doing. How often do you provide the reasons for advocacy, how often do you provide the reasons for a customer to say to someone else ‘this is good’. Is it the first? ‘I used the first’. Is it the last? ‘There weren’t very many of them left, I got the last one’. Best, rarest. Can you provide them with a reason that will make them feel that they are special, to feel proud about what they have done with you. Because by providing those kinds of things what you do is:
- Make them more likely to come back to you
- Make them feel good about the purchase or activity that they’ve undertaken
- Make them become your advocates
These are the things that people will tell and pass on. Not just the fact that they thought it came in a nice colour or it looked good.
In terms of persuasion windows again, exploiting a thank you. Marketing Sherpa did a research exercise on thank you pages. What they realised is that when people have done something on a website, for example they bought something, or signed up for a newsletter and they went through to a thank you page what happened is that there is a 39% chance that they would do or buy something else. There is no other pages on your site that have that kind of conversion rate. It could potentially be the most powerful page on your site. And why? Because you have already persuaded them you got all of the trappings out of the way so the window opens up. One last thing to add is that the same study found that at that point though 39% did something else 19% did something other than the main thing, the call to action that was on that page. So when you have that kind of persuasion window open, always make sure you provide a choice of what people can do. Don’t just provide them with one thing that you want them to do.
Has anyone heard of the term ‘alarm clocking’. Really, it’s about providing reasons to return regularly. In the early days of the web there was an AGFA site that incentivized you returning on a weekly basis. Every week you would go there and they would set your three questions that you could answer by going around the site and finding out various things and in return for your correct answer to these questions you would be provided with a free font. So every week you would come back in order to get your free font. And what was clever about it is that if you didn’t come back that week when you came in the following week they would show you the font you couldn’t get any longer. So they were reminding you ‘hey, you didn’t come back, you’ve blown it’. The idea behind this is to try and see if you can get your customers to set their alarm clock to make sure they come and visit you. What is it you’ve got that you can introduce on a regular basis: just a free thing, a little bit of information that stimulates to come back. You are thereby cultivating a higher degree of engagement on a regular basis.
I am continually amazed at people’s inability to show off how good they are. If you got status, if you’ve got recommendations, if you’ve got clients that are big corporations that stand for something, if you’ve got major government sponsors, if you’ve got new publications, make the most of it. Show off your authority and expertise. You don’t have the opportunity in the initial stages to undersell yourself to your customer.
The power of the portrait. We talked about how credibility is central to the ability to persuade. And first impressions do have a lasting impact. A study looked at information and what impact titles, author pictures, and author descriptions could have. The thing that made the biggest difference, which delivered twice as much credibility was a relatively formal photograph of a person. Both overly formal and overly informal pictures on the other hand have a negative impact. From this viewpoint the recent trend for people to put pictures of themselves as children on their websites I think is unproductive.
We like buttons. We are not that keen on ‘Submit’ buttons because they are a bit of undescriptive. Putting little graphics, or boxes around buttons makes them work better
Loss is more powerful than gain. How often do we say what the customer is actually going to be missing out on if he or she didn’t buy our product or service. We do not say that very often as we are obsessed in detailing all the features and benefits.
Trade-offs. In the context of persuasion window, trade-offs, making the customer think whether something is worth their money close the window. When the persuasion window opens, good. Provide choice, bad.
And that’s me done! Never want to miss an opportunity over a persuasion window with a thank you. I’ll leave you with those three points.
Thanks very much.
RICHARD SEDLEY:
We hope you found this podcast interesting and useful. You can find more podcasts and articles from the cScape Customer Engagement Unit on www.cscape.com. Until next time!