Customer Psychology: Why Don't People Buy Your Stuff?
Grit & Growth
Introduction
Sir Jonathan Lavov is the King Philanthropies Professor of Marketing at Stanford's Graduate School of Business. He talks about how to assess customer needs, differentiate yourself from your competitors and capitalize on a key dimension that's often overlooked in emerging markets.
Welcome to Grit & Growth’s masterclass on marketing, featuring Jonathan Levav, Stanford Graduate School of Business professor of, you guessed it, marketing. Levav provides insights and advice on the psychology of customer marketing so you can learn how to get into the heads and hearts of your customers, influence their decision-making, and get them to choose your brand over the competition.
Professor Levav has a PhD in marketing with a passion for exploring the brains and guts of decision-making — digging deep into why customers gravitate to one brand over another. Talking to customers is the best (and according to Levav, the only) place to find the answers.
“People think that their task is to make a product. Their task is to understand customer needs and to create a product that meets those needs. And I think that if you're the CEO of a company and you don't speak or interact with customers at least once a week, you're not doing your job,” advises Levav.
His research and teaching focus on the psychological dimension of marketing — or why we consume. As he says, “If we just consume things because of functionality, there's no way we would pay what we pay for Apple phones, for Nike shoes, for clothes, like nobody would do it.”
Top Six Masterclass Takeaways
- Entrepreneurship is personal. Levav encourages you to figure out what type of problems you like to solve. “Some people like construction, some people like rice, some people like technology, some people like chicken wire. There's plenty of needs you could potentially address — some more profitable, some less profitable. Ultimately, the decision is kind of: What do you like to do most?” he explains.
- Don’t be so literal. Levav encourages marketers to go beyond describing simply what a product or service does. He says, “You can appeal to people in lots of different ways, and you can create competitive advantages along values that are way beyond the very literal thing the product does.”
- Marketing is three-dimensional. The first is the functional dimension or what the product does. The second dimension is economic — how sensitive customers are to price. The third dimension is psychological. And according to Levav, this is the biggest opportunity: to explain how the product can make customers feel better.
- Get out of the office. Levav believes that observing customers is critical to figuring out what customers want … and why. “You're never going to solve these problems staying in the office,” he says. “And by the way, you, the boss, need to get out of the office. Not just your underlings, not just your marketing person. You need to feel it on your flesh.”
- Map your customer’s journey. It’s important to understand every interaction your customer has with your business — step by step and over time, what led them there and what actions they take next. This applies equally if you’re B2C or B2B. “As long as you're not selling to computers, you're selling to people, and people in this firm that are buying from you have a journey, too,” Levav says.
- Don't undervalue simplicity. Nobody buys things that are ambiguous, says Levav. So, make sure your message is crystal clear to you and your customers. If you don’t get it, they won’t either.
Listen to Levav’s insights, advice, and strategies for how to better understand your customer and create a cohesive story to meet their needs.
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