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The consumer psychology of successful product design

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A product is anything you offer to a market, not only strictly tangible, but intangible as well: an idea can be a product, or a political candidate etc: factoring in the consumer psychology in engineering your items is a crucial importance in developing a sustainable competitive advantage.

Shaping good products is key to please today consumers, and a few tactics can be applied irrespectively on which niche we operate in in order to be more likeable and intimately successful.
It can help to visualise the product as composed of different layers:

The Actual product is what we see, the obvious functional product such as a car, a pen or a lifestyle brand consulting service.

The Augmented product is the set of add-ons that come with the product such as costumer service or any perk that can be used to differentiate from the competitors.

The Core product is the invisible psychological reason for the thing to exist, and it’s nature can be traced to subconscious timeless needs and features of human nature.

Having a functional and performing actual product is obviously fundamental, but the most successful solutions cater to the basic human needs and use psychological triggers to activate the desire of the buyers leveraging consumer psychology insights. Things like status, community involvement and caring for others are what really lies at the base of why certain solutions are purchased.

Understanding what core psychological need you are trying to meet should be the first step of designing any new product, even before delving into the technical specifications: it is here that everything starts

In the lifestyle product brand space, the status, exclusivity and air of good taste that are infused with the trademarks are often the core product itself that costumers are willing to buy.

“Signalling status, exclusivity and a discerning eye are core features for lifestyle brands”

How to correctly identify the competition

It is crucial to have situational awareness regarding your specific market and where you are in relation to it, think of 3 elements as the 3 “C’s”: Company (you), Costumers and Competition.

If we visualise them as three overlapping circles, we can shift our focus in the area where your company and its potential costumers overlap, but the competition has no real estate: this is where you can build your value proposition. But to get there we have to properly assign a perimeter to the competition.

Besides narrow competitors with almost identical features such Coca-Cola and Pepsi, you have to keep in mind your product is competing with a variety of less obvious alternatives: this is common in commodified products with indistinguishable players such as the fast moving consumer goods space

The “form competitors” have substantially different features and use cases, but can take away your market share, for example water or an energy drink are form competitors to the aforementioned coke: start to think in terms of consumer pscyhcology to uncover valuable insights.

Need substitutes are even harder to detect and not obvious, this is solutions to the same problem that your product solves: in the case of someone drinking coke too get their caffeine fix, it would be coffee or caffeine tablets, what alternatives solve the problem your product is meant to address and how are they stealing market share from you?

Finally resource competitors are a broad base of other costs that compete with your product for the same budget: in B2B a consulting service compete with marketing advertisement spend or human resources hiring budget for example, ultimately all resources are limited and you are competing with many other companies wanting a share of them.

“Run a short competitive analysis every time you make a decision”

How to find a niche for your lifestyle product

Being in a good market with a solid product that satisfy that market’s needs is the position you want to ultimately find yourself in: a good product-market fit it is fundamental – but communicating to every possible potential costumer would be too costly and dispersive, so savvy marketers segment surgically and address smaller niches.

Traditionally segmentation has been conducted on the base of demographic factors such as gender, age, ethnicity and socio-economic status, but with the latest societal trends such method can be outdated, new segmentation techniques have take in into account different parameters including Jung’s archetypes (the hero, the sage etc.)

“Segment your market based ono needs, not just demographics”

We advocate for benefit based segmentation, where niches are uncovered based on what people are trying to achieve by purchasing the product rather than who they are. Find a set of consumers that share a common unmet need, this is your target niche.

The idea niche satisfies four criteria:

The members have to have enough combined spending power to make them worth pursuing. If you develop a product that is only good for one person, but it costs millions of dollars and that person is willing to purchase it, the niche can be of one person only.

The niche has to be identifiable and well bordered, for you to be able to put any individual within or outside the niche and know if they have that unmet need

You need to be able to reach the niche: some people are not online, some other do not watch TV, ideally you have a privileged channel of access that you can leverage to communicate to your target market

People in the niche are homogeneous in their relating to your product, they do not have to be identical, but the core meaningful interactions that they have with your products should be similar in order to allow you to make consumer psychology predictions regarding their reaction to price changes, communications etc.

Even the brands that today cater to the broader audiences, oftentimes at their inception they were taught our for narrower niches, such as Facebook which started as a college campus social network, or Amazon which used to be a bookstore: starting from a narrow, well defined niche that meets the four criteria seems the way to go to build a global brand that scales over time.

What is product innovation?

When thinking about innovation most people associate it with radical innovation: when a new product or services is introduced into the market where it had no predecessor, something completely new that disrupts a market – such cases make big news.

Incremental innovation, on the contrary, consists 95% of all innovation and is a slower process where an existing product or service is improved a bit at a time. Incremental innovation is a necessity and substantially more achievable than radical changes.

“Innovation boils down to serving a costumer needs better than your competitors”

So introducing features that are meaningful to consumers, even minor improvements, can be defined as innovation and should be pursued relentlessly. This improvement can be perceived by the users in different ways, from paying the same amount but now receiving more value from the solution – or psychological.

The following matrix can serve as a map to uncover unarticulated needs and innovate around them. A useful exercise is that of analysing your competitors product pretending to be a consumer, find out what areas are weak and structure your innovation in order to address those pain points your competitors have specifically.

“People don’t buy a drill, they buy a hole – what’s the job of your product?”

Innovation should, therefore, not be seen as a one-off genius idea, but rather as a systemic bias toward allocating resources aligned with areas where opportunities are likely to emerge, structure best practices and enable consistent growth.

Product friction in consumer psychology

After having identified a profitable niche to target, having built a strong core product and loaded it with positive associations, differentiated it from competition and positioned it well to seize opportunities for ongoing innovation – we have to keep costumers coming in for more to secure recurring revenue. This is achieved by minimising friction and pain-points that your users face in the usability of the solution.

“The ultimate stopping point is having to open your wallet”

A typical model has recently been the one of gamification, adding tweaks that make the experience pleasant and even addictive by leveraging the dynamics typical of games in otherwise boring products.

Instinctively we might be motivated to add more bells and whistles to our products in order to make them more attractive, but it might be worth considering deleting and removing redundant features and staying lean to minimise friction.

In a friction audit we map and understand all the points of contact between an user and your product in order to optimise them, increasing positive dopamine boosts and minimise psychological burden: the result should be a streamlined easy and intuitive experience with minimal learning curve. Once we identified specific moments where consumers have an unpleasant feedback, we know at which point we loose them, what does not work: it might be details for us, but the audience is not as engaged as we are around our products and the smallest inconvenience does result in drop-out rates that can make or break any business

  1. The Exploratory phase: in this phase you do your research regarding the consumer psychology of user journey around the experience you offer: observe consumers in their natural environment such as the store, how quick do they make decisions?

“Find moments where consumers stop interacting with you and understand why”

For example when you end reading an article that is normally when you close the newspaper, that’s why on Netflix the next episode of a show begins automatically after the previous one ended, the goal is to keep the user on board for as long as possible in a single session.

  1. The Intervention phase: Go trough every interaction point between your product and the costumer and ask yourself whether there is a way to perform the action in a way that requires less work and “pain” from the costumer, how can it be streamlined? What can happen in an automated way behind the scenes.
  2. The confirmation phase: make sure that the interventions made sense and the users are more satisfied, or give higher conversion rates to the next event after your have been implementing the chances

“Remove sticks rather that adding carrots”

The role of product loops in consumer behaviour

Product loops are a typical gamification technique that many digital platforms deploy, for example language learning app Doulingo keeps users logging in in order to unlock an increasing amount of badges and achievement unlocks, as well as climbing up leaderboards, while archiving their study goals. Features that are embedded in the product and reward consistency of use are ensured to trigger specific psychological reward systems to get the costumers coming back for more.

Creating engaged communities around your product is also a winning strategy in consumer psychology: the consumers will feel compelled to share their achievements and experiences with the product with other passionate users and will stick with your for long, as well as advocate to other potential community members.

When creating product loops remain ethical and never nudge users into performing actions that are bad for them, the users should both want and like what your are making them do, as wanting without liking is the definition of addiction.

“Wanting without liking = addition, avoid it”

In general the human nature is that of completing unfinished tasks to get a sense of closure, products that offer experiences which need to be complete can leverage this subconscious bias and deliver superior usability.

The psychology of value

In most cases it is impossible for a consumer to immediately understand the intrinsic value of a product, the role of marketers is to best frame the value. By anchoring a product to human needs we can give meaning to its value.

By identifying the basic psychological needs to embed in the core product, and signalling your commitment to meet them with cues in the actual and augmented product, we deliver a consistent image that frames our solutions and makes them identifiable and desirable at first sight.

One of the most valued “commodities” is time, products that save time and optimise repetitive processes in the lives of their users are usually very successful and there is always a market for them.

“for the world’s most affluent consumers time is more valuable than money”

Validation, social status and belonging are some of the most powerful psychological needs that most people are looking to satisfy and our lifestyle products can be based upon this bedrock.

We help aging brands reposition themselves and coordinate their marketing activities in order to remain relevant to their evolving user bases, get in today today for a consultation with our expert or propose us your project.

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