C hange Your

ustomer's Habits to
Gain ROI

Research Report

JANUARY 10, 2024

Company: MULSE Enterprises

Research Source: LinkedIn

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MULSE Enterprises Ideate Execution
7 Rules Guaranteed to Change Your Customer's
Habits to Gain ROI
I buy everything on Amazon. Suppose I want something; that is where I go first.
Not only that, it's usually the only place I go. It's habitual, and breaking it would
be difficult for anyone.
But not impossible. Today, let's look at seven ways you can change habits to
improve your return on investment.
Before we launch into that, let's review what is happening with habits at a
psychological level. There are a few distinguishing features of habits, which
include the following:
An environmental cue initiates them.
The cue triggers the automatic part of our brain to respond with a behavior based
on memories.
The reward reinforces the reason for the habit.
The idea here is that our Intuitive System will recognize this cycle the first few
times we do it and turn it into a habit. Now, it will be automatic.
Customers have habits. So, if your customer is habitually buying your competitive
product or service, how do you change that? Here are seven ways.

Rule #1: Identify that habit and loop people are in.
You should be able to identify the cue, response, and reward people get from
their habitual purchases. Then, you can determine why they buy from someone
else.
The tricky part is that cue. The response is obvious: they are buying from the
competition. The reward might also be evident; it could be a good price or more
straightforward not to think about it. Whatever the reward is, it's essential to
understand what it is to the customer whose habits you want to change. However,
the cue is more elusive and might require more work.
For example, we have bought Aquafresh toothpaste for 40 years. We have never
even considered another brand. Our cue to purchase is turning into the toothpaste
aisle at our local market. Our intuitive brains say, "Oh! I know what we get here,"
and walk us to the toothpaste aisle.

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Rule #2: Once you've identified where that habit is, introduce a
new cue to replace the existing one.
Identifying the different stages in the habit loop provides an opportunity to
intervene. If you want to change habits, the most effective way is to disrupt that
cue.
Therefore, knowing that we are doing that walk to Aquafresh in the aisle gives
you the information you need to understand what makes us buy that toothpaste.
If you represented the other toothpaste brand, you could develop a strategy
addressing that moment.
Can you introduce a new cue?
Can you modify the cue or the trigger so people do something else instead?
For example, getting an end cap display in the grocery store might get our
attention before we zombie-walk to the Aquafresh. We are not in habit mode by
encountering the toothpaste in a different part of the store. So, we might evaluate
the competitive brand differently and perhaps even try it.

Rule #3: Make the transition easy.

Minimizing any barriers that might get in the way of a new behavior is essential.
Making it easy to do and user-friendly is what creates rewards. Rewards create
good feelings (or something else just as valuable related to the situation), which
lead to happy memories. These happy memories are what the Intuitive System
remembers when it starts cueing up habitual behavior, and voila! A new habit
forms.
When you're approaching habit change, the vital thing to remember is that we
evolved into habits to make things easier for us. Therefore, if the process of trying
to break somebody out of a habit requires lots of effort on their part, there's an
excellent chance it's not going to work.
Apple did an excellent job with this regarding Apple Pay. It's so easy to wave a
phone near the reader. It became my go-to way to pay. I am grouchy when the
system doesn't work with it. I can't believe I will have to get my credit card out of
my wallet (which might not even be on my person at the moment) to pay.
So, the lesson here is that it won't be enough to introduce a new cue that leads
to a new behavior. In addition, the system has to be easier for your customers if
you want it to stick.

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Rule #4: Provide a compelling reward.
The new behavior's reward can't be less of a reward of their old habit. It needs to
be more than the reward of their old habit, whether it saves time or money or
provides a discount or loyalty points.
The Intuitive System drives these habits. The intuitive system responds better to
certain rewards than others, which tend to be rewards of ease, reduced effort,
and things that taste good, feel good, and are generally hedonic.
Running today in winter so you look good in your swimsuit next summer has no
appeal for the Intuitive System. Nor does it care that running might help you live
longer. It also doesn't care about whether you have any money in your retirement.
It is interested in what happens now. Your intuitive system loves the reward of
staying in bed rather than getting up and running.
So, if you want your customers to form a habit, the reward has to be intuitive,
meaning it makes them feel good. Moreover, the feeling good has to be right now.

Rule #5: You must educate and communicate.

As with all things in your experience improvement programs, you need to train
people on the new habitual process. This training addresses the response part of
the regular cycle. As we mentioned in rules three and four, facilitating habit
changes has to feel easy and worth the effort (now) to be successful.
For example, Airbnb has changed people's habits of booking hotels. However,
unlike a hotel, no one at the property can give you the key. Therefore, Airbnb has
a Key Café where the renter can get their key. If you don't know how this part of
the customer process works, Airbnb made a video that explains it.
So, rule five builds upon the two previous rules. Make it easy and intuitive, and
then make it rewarding, which you support through customer education and
communication.

Rule #6: Reinforce the new habit.

It is essential not to assume that because somebody has disrupted their
automatic behavior once, they're now going to do it forever. It is incumbent upon
you to reinforce that new behavior until the new habit forms.
Now, with a bad habit, this type of reinforcement isn't always necessary. You can
quickly get into the bad habit of eating cookies every day.
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Good habits, or at least not so intuitively rewarding habits like eating cookies,
might take more work. You might have heard that to form a new habit, one must
perform the activity 21 times. While I doubt that this statistic is accurate for every
behavior, it illustrates that changing behavior requires consistency for a time
before it becomes habitual.
Also, the necessary frequency of the behavior influences the reinforcement
efforts. So, changing to Apple Pay over paying with cash or card is a behavior
that occurs several times in a given period. Therefore, consistent reinforcement
is more accessible to implement and more straightforward to manage.
However, consistent reinforcement is more challenging if you infrequently engage
in the behavior. For example, a health insurance company that wants to move
customers' questions to their app over their call center might have difficulty
changing behavior. Why? People don't have that many questions for their health
insurer. So, even after you get them to engage with the app for something, they
might forget before they need anything again—so it will be back to their old tricks
of dialing in.

Rule #7: Be patient.

Some of these changes aren't going to happen overnight. Patience is key.
For instance, customer feedback is essential in the health insurance example
above. Permanent change requires understanding whether the cue disruption
works and whether the reward is compelling enough for the Intuitive System to
remember. If not, customer feedback can help.
Remember that the other habit isn't gone completely. You are reprograming the
habitual cycles but not erasing the old ones. Therefore, patience and consistency
are critical to replacing the old habit with the new.
These seven rules can change customer habits and improve your return on
investment. First, it would be best to identify the habit loop that your customers
are in and introduce a new cue to alter their behavior. Then, ensure it's easy and
provides a compelling (instant) reward. Follow that up with education and
communication, as well as reinforcement. Please don't assume that because the
customer's done it once or twice, they will continue doing it. You have to reinforce
it over some time. Finally, remember that it's not going to happen overnight.
Changing habits takes time.

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