Welcome back to another episode of the behavioral economics and marketing podcast series. This is Sandra Thomas Commonall. During the last few episodes, we’ve been hanging out in a series on the customer journey, doing a deep dive into what they are, why they are important, and how to optimize customer journeys through behavioral economics.
In this episode, we’ll discuss dual process theory and several ways to apply it to customer journey optimization. But before we get started, I wanted to give a shout out to Gary Angel at Digital Mortar for sitting down with me to discuss some of the products and services they provide for brick and mortar stores, such as end-to-end shopper journey analytics, including heat mapping, pathing, and funnel. So jumping in, what is dual process theory? Dual process theory is a psychological term that describes the two different modes or systems of thinking.
System one is implicit, automatic, subconscious, emotional, and fast. It is effortless, while system two is explicit, logical, deliberate, and requires effort and energy. System two processes are those that require working memory, and system one are those that do not.
System one is solving the problem two plus two, reading the words on large billboards, driving a car on an empty road. But it is also finding a strong move in chess, if you are a chess master. If not, that would activate your system two.
System two is mobilized when a question arises for which system one does not offer an answer. For example, calculating a difficult math problem, parking your car in a narrow space, or filling out a tax return. Okay, so why is this important? There are many applications of dual process theory in the realms of marketing, leadership, customer journey optimization, the list goes on.
And just a bit about customer journey optimization. Customer journey mapping helps you to visualize how customers experience your product or service, channel performance, customer engagement, and customer needs. Understanding the customer journey allows you to improve the customer experience, increase conversion rates, and so on.
One of the first steps in customer journey mapping is to develop customer personas. This is your chance to really get to know who your customer is. Take the time to list everything that you know about your customer, their motivations, how they use your product, how often they purchase your product, their pain points, their goals.
One key piece of information is whether your customers are using system one or system two, and whether that is where you would like them to be. System one is making the beeline for the routine purchases, such as toothpaste. System two compares the different brands, options, sizes, etc.
System one will make that impulse buy, such as that grab and go snack at the checkout. And system two will remember that they have food at home. So let’s take a shoe store for example.
A system one customer may come in to get white tennis shoes. They know exactly where they are in the store. They know the brand they are buying and the size to get.
They grab it and go. Whereas a system two customer may be looking for a pair of dress shoes. They will want to find a pair that will match their outfit, their purse or accessory.
They will want a pair that isn’t too dressy or too casual, that fits well and is comfortable, especially if the occasion will call for them to be on their feet for a while. Here are two broad types of customer personas, system one and system two. If you want your system one customers to browse more, try reorganizing your store every so often. Put those routine purchases type of shoes towards the back without a direct path to them.
Or consider offering somewhat differentiated close substitutes. Having three similar types of shoes next to each other may make the customer have to consider the idea of sticking with the same brand or trying a different one. And now let’s talk about toothpaste.
Let’s say that you are the marketing manager of a new toothpaste brand. The competition is tight and what makes it even harder is that toothpaste is a routine buy. Many customers have a brand and type and even size that they buy every time without even thinking about it.
This is a system one thinker. How could you convince them to switch or even contemplate switching? You could try optimizing your shelf space, preferably switching spaces with your closest competitor. You could have an end cap display or even offer a store discount.
These small changes can help to move that system one thinker into a system two thinker. And now let’s talk about grocery stores. System one customers have a list, mostly routine purchases such as pasta or toothpaste.
They efficiently move about the store, sometimes doubling back for items they forgot. They usually are buying 20 items or less and are trying to get quickly in and out. System two thinkers, they are the ones that walk in to get dinner not knowing what they are getting.
They will put the meal together as they shop. They will linger over the bakery, strike up a conversation at the deli counter or squeeze a couple of tomatoes. They might not have a plan coming in, but they will be very specific about what they buy.
It is the system one customers that can be nudged to purchase a little more, spend a little more time and pick up that impulse buy at checkout. Have you ever walked into a grocery store that was heavenly scented of baking bread? Then without knowing it, you were buying bread and heading to the meat counter for meatballs? This is actually a form of nudging called the priming effect. The powerful scent of bread entices you to purchase not only bread, but other foods to eat with the bread.
And it does this without pulling you out of system one thinking. Using scents, sounds and visual cues can help nudge your customers. Besides that, you will want your displays to be attractive, but not something that will force them into system two.
You don’t want them to have to think about their purchases too hard. Use close associations and easy decisions, such as bread and butter. Make it easy for them.
For example, during the summer, you will often see s’mores displays that will have all the ingredients for s’mores, graham crackers, chocolate and marshmallows. They won’t include the store brands. Customers will often pick up the name brands on a display such as this, even if they wouldn’t normally.
In fact, customers who weren’t even thinking about s’mores may pick up all of the ingredients because it’s quite literally is a no-brainer. Stores may choose to add add-ons to this display like white chocolate or fresh bananas, but adding too many choices will make it more difficult to choose and will result in no purchase being made. But this can easily be applied to all manner of stores.
Take the example of system two store customer at the shoe store. A display could include purses, shoes and other accessories that match. The system two customer would come in for shoes and leave with a purse, shawl, jewelry, as well as those matching shoes.
And many customers will see this as a benefit of shopping with your store as you have made the shopping process simple. For example, I was recently shopping for a formal event where I had to buy the accessories all at different stores and it was very difficult to make sure that all of the accessories matched not only with each other but also with my dress. It would have been much easier if the store where I bought my dress had all of the matching accessories on display next to the dress.
And I also wanted to mention those impulse buys at the register. These impulse buys are generally high in calories, carbs and or fat and though it is effective for many customers, many customers are also conditioned against grabbing unhealthy foods. This conditioning is within the realm of a system one customer.
Therefore, putting a few healthier options may sway those healthy eaters at the register. Okay, so now let’s apply this to an amusement park. As we saw in the grocery store example that system one customers don’t always act the same.
I grew up in the northeast and quite often visited an amusement park called the Great Escape. As an avid fan and frequent visitor, I knew there was one ride that I had to ride. It was called the Comet.
The Comet is a wooden roller coaster that is located at the back of the park and is one of the most famous and attractive rides at the park. For this reason, there is always a long line for the ride. Despite this fact, I would always make a beeline for the Comet, wait whatever time was necessary and during the course of the day make my way back to the ride six to seven times.
On the other hand, there is my sister who also loved riding the Comet but despised waiting in lines. She would mosey around the park and ride on the rides that had shorter lines. This is still a knee-jerk reaction and a system one customer but with different set of priorities.
Whereas a system two customer at an amusement park really makes a day of it. They come maybe once a year or even less than that but they consider it to be a very special day. They may not come with a set plan of what to see, eat and ride but allow themselves to be led just as the system two customer at the grocery store did.
Wrapping it up, understanding how we as humans make decisions is an important part of marketing and leadership. Behavioral economics is a study of decision making and can give keen insight into human behavior and help to shape your marketing mix. In this episode, we consider dual systems theory on customer journey optimization.
Dual process theory is a psychological term that describes the two different modes or systems of thinking. System one is the automatic mode of thinking where system two is the calculating mode of thinking. In this episode, we used examples of toothpaste buying, grocery stores and amusement parks to better understand our customer’s mode of thinking during purchases.
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