Founder & CEO Beyond Philosophy
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11 ways Apple uses psychology to develop experiences

We could all learn a lot from how they Apple uses behavioural economics and psychology to facilitate customer-driven growth. 

3rd Apr 2020
Founder & CEO Beyond Philosophy
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Psychology customer experience

Apple has an excellent experience. We could all learn a lot from how they approach business-as-usual to facilitate customer-driven growth. 

Why do I like Apple’s experience? Before I answer, I should have my guitar.

I am just kidding. No one wants that. 

What we do want is to know how to facilitate customer-driven growth. Apple is an excellent example of how to do this. In a recent podcast, we outlined some things happening every day in Apple’s experience, where you can see behavioral economics and psychology playing out in the real world. Here’s what we found:

1. They maintain Tribalism. 

Tribalism is key to the Apple brand. In the early days, being with Apple was like being the underdog, like “it's us against the world!” They've kept this feeling even though they've become huge.  It still has the feeling of being a part of a group with shared beliefs. 

2 Their retail experience encourages feelings of ownership. 

Apple revolutionises the way that people shop. Going to the store is like going to a club. It doesn't feel like a store, but more like a venue. At Apple, you are encouraged to play around with the computers and hang out, which promotes the Endowment Effect. The Endowment Effect says that when it feels like you own something, you tend to value it more. The longer people play around with your technology, the more customers feel like it's theirs—and the more painful it would be for them to give it up. 

3. They take advantage of Social Proof. 

Social Proof describes how we want to do what everyone else is doing, aka peer pressure. Lines outside the store is almost the prototypical example of Social Proof. Apple gets those all the time for free. The lines are evidence of the superiority of their product every time they launch a new one. If you see lots of people using Apple products, or if you hear from many friends how good the latest Apple product is or you see lines outside the store, it influences your perception of the brand. You think, well, if everybody else is using it, they must be good for me. 

4. They use the Availability Heuristic. 

The Availability Heuristic evaluates the likelihood of occurrence based on how easy it is to bring them to mind. It describes how we think things are imminent based on how easy it is to remember something similar happening or the ease with which we can imagine them happening. If you see lots of examples of Apple being used by cool people in cool places (aka Social Proofing) or being easy to use and effective, then you will estimate that your Apple product will perform similarly. Also, if you see how people react to it and hear everyone talking about it, then you want to feel like part of the in-crowd (aka Tribalism).

5. They maintain their Price Image. 

Price Image is at play in the Apple brand, too. When I think about Apple, I think of quality products. Yes, you pay more; they are more expensive than the other brands. However, the quality is excellent, also. It's hard to know how high quality your phone is. You don't open it up and check the guts and see what's going on there. For most of us, even if we did, we wouldn’t know what we were looking at, so we use price as a strong signal of quality. To the extent that Price Image is a part of their strategy, it has been effective. Moreover, Apple has been super aggressive about making sure that no one discounts their products. With loads of channel power, Apple dictates the price to its retailers. If retailers lower it, then Apple won’t sell to that retailer again. That’s such a substantial threat that nobody ever puts the iPhones on sale. No matter where you buy it, it's always the same price. 

6. They use heuristics. 

Another way Apple communicates their superior quality is in the experience of opening the box. From the quality of the box to the way it's packed to the presence of all of the components inside, it exudes quality. The box ties to a psychological principle called a heuristic. Heuristics are decision shortcuts we use, aka rules of thumb. Many times, things we care about, like the signal quality or phone performance, are challenging to measure. We use heuristics, like the unboxing experience, to determine the phone’s quality. In other words, you break down your quality decision into something more comfortable to judge, like the way the box looks and feels when you open it. 

7. They have excellent attention to detail. 

Small things have an enormous significance on customer behavior. Even though you're making a big decision about a $1,000 iPhone, it’s the little things that influence you. Apple's among the best at realising the importance of those things (see unboxing example above). 

8. Their brand has an excellent Halo Effect. 

The Halo Effect describes how we draw specific conclusions about something based on our overall impression of it. If you are a reliable brand that means something to customers, the Halo Effect provides advantages for brand extensions. So, for example, if Apple were to go into a new category, like memory cards, and I saw their product amongst the other brands, I would bring my different experiences with Apple into that buying decision. I would think, “Oh, this is going to integrate with everything else I've got seamlessly. This is high quality and very well-designed, and probably more expensive.” All of those impressions come with me to that buying decision via the Halo Effect. 

9. They appeal to the Intuitive System. 

You want customers to buy your product intuitively, which means emotionally. You want them to make a quick, automatic decision based on emotional engagement with your brand. This concept is the whole premise of our book, The Intuitive Customer, and our podcast, also The Intuitive Customer. I buy Apple intuitively. If there were pre-orders for the next iPhone, I would sign up, sight unseen. 

10. They understand the importance of memory. 

My experiences with Apple produced a bunch of positive memories that affect how I feel about them today. As you might remember from Nobel-prize winning economist Professor Daniel Kahneman’s Peak End Rule, what people remember about your experience is the most intense emotion they felt and how they felt at the end. The Peak End Rule requires organisations to ask what emotions they want to evoke in their customer experience. These emotions should be the ones that drive the most value for your company. 

11. They naturally put customers first. 

I wrote a book in 2004, Revolutionize Your Customer Experience, that showed the four customer-centricity orientations that organisations have, which range from Naïve to Natural. Apple is a Natural organisation, which means they focus on the customer in everything they do, even training the team on how to do it. Gizmodo published “How to Be a Genius,” which included excerpts from Apple’s secret Employment training manual. A significant part of this training is a concept based on the three Fs, which stand for Feel, Felt, Found. The three Fs are wording for Apple employees to use to manage customers’ emotions. For example, if the customer objected to the high price of Apple products, the Genius would have guidance on how to manage that objection. He or she might respond with, “I can see why you would feel the price is high. I felt the same way at first. However, I have found that the quality of the product delivers more value than more economical options.” Tying these high order fuzzy principles down to concrete language works. 

There are several ways you can use these insights to build an experience that leads to customer-driven growth for your organisation: 

  • Train your team on how and why. Give people specific actions to take, like how to stand or what to say, or even what not to say. However, it is also vital to explain why you chose that specific action. When people understand why it can help facilitate acceptance and get them to buy into what you are trying to accomplish. Our Memory Maker training is similar to Apple’s strategy. 
  • Mind the details. Figure out what it is that you're trying to communicate with your experience and then focus on the details. Think about all of the small things that customers encounter that objectively don't matter, but that, in reality, do.
  • Know your tribe. Understanding your tribe or tribes is crucial. Be aware of what the value of the tribe is to individuals and maintain those qualities. Segment your offers to appeal to the different values for your various tribes. 
  • Consider how to use the endowment effect. Determine how you can get people to use your product, so they feel ownership of it, increasing the value they give it.  If you can build it into their lives as a trial, you can influence them to choose you intuitively moving forward.
  • Find a time machine. If you can manage to be Apple, you should be. Travel back in time and introduce Apple before Jobs and Wozniak do.  

Of course, I am joking with the last one, but only because we can all learn a lot from Apple. (Unless you have actually have a time machine. Then, I’m not joking.)

Apple has an outstanding experience and you can see the results. They understand their customers, how they think and feel during their experience and what they can do to make them feel emotions that keep them coming back for more, or what we in the business like to call customer-driven growth. Therefore, we believe the question is not whether you should be more like Apple, but instead when are you going to be more like Apple? 

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