Ch. 7 — Developing Your Customers: Customer Psychology
Learning Objective 7.2
Differentiate the types of customers entrepreneurs may encounter.
Understand how customer psychology shapes buying decisions and how to design for those decisions.
7.2 Customer Psychology: Overview
Customer psychology studies the processes behind what customers want or need, the thoughts and emotions driving decisions, and the impact of outside influences (friends, family, media) on purchasing decisions.
Key assertion: many purchasing decisions are subconscious. As per Gerald Zaltman (Harvard), about 95\% of purchasing decisions are subconscious.
By gaining insights into customer psychology, entrepreneurs can meet the needs of their customer bubble and provide better customer service.
Actors in the Buying Process (Figure 7.1)
The "customer bubble" includes multiple actors who influence a purchase. Entrepreneurs should consider all roles.
Six actors in the buying process:
End users
Influencers
Recommenders
Economic buyers
Decision makers
Saboteurs
These roles can overlap; depending on the business, a single customer might play more than one role.
Six Actors in the Buying Bubble (Table 7.2 context: video game example)
End users: the customers who will actually use your product; they buy it (or not), touch it, operate it, use it, and judge its value.
Example: Teen playing a video game.
Influencers: people with large reach or authority who can sway opinions; their endorsements matter.
Example: Celebrity endorsing the video game in a commercial.
Recommenders: individuals who evaluate your product and share opinions publicly (e.g., bloggers, industry experts, mid/fewer-followers influencers).
Example: Instagrammer posting positive reviews and screenshots of playing the game.
Economic buyers: buyers who decide whether to stock or purchase in large-scale contexts (retailers, corporate buyers).
Example: Buyer for GameStop who decides to stock the video game.
Decision makers: individuals higher in the hierarchy who authorize purchases; may be CEOs or equivalent authorities in the buyer's organization or household-level decision makers (e.g., parents).
Example: CEO of the gaming company deciding to buy the game from the designer.
Saboteurs: individuals who veto or slow down purchases; may be top managers, friends, spouses, or even children; can intentionally harm a brand.
Example: TikTok influencer with concerns about negative effects; brand sabotage via social media.
Notable risk: brand sabotage in the social media era can be loud and damaging (consumer brand sabotage). Example: #BoycottTanishq after a controversial ad in 2020.
Influencers and Modern Marketing Dynamics
Influencers (with large followings) can have outsized impact on purchase decisions.
Celebrities, journalists, analysts, and bloggers also shape decisions, but social media influencers who build credibility online are increasingly central to marketing.
Example: Lynn Yamada Davis (Cooking With Lynja) gained millions of followers and attracted deals with major brands (McDonald’s, Amazon, Chobani).
Takeaway: identify which actors in your market truly move the needle for your product and tailor outreach accordingly.
Customer Personas: Definition and Purpose
A persona is a semi-fictional representation of your ideal customer, based on information and market research.
Purpose: to help you connect with your target audience and tailor messaging; a persona is not a real person, but a most-likely buyer type.
Why personas matter: they engage teams, guide product development, and help anticipate buyer behavior in different scenarios.
Demographics and psychographics alone are insufficient; over-reliance can yield an incomplete view of buying behavior.
The Six Core Components of a Persona
Demographics: age, gender, salary, location, education, family, ethnic background, etc.
Useful for identifying target end users but not enough to predict behavior; can be misleading if overemphasized.
Psychographics: attitudes, values, fears, aspirations, what they admire, what they believe; deeper understanding of motivations.
More predictive than demographics but harder to obtain and analyze; social media profiles can help but may not reveal deeper fears.
Proxy products: other products a person already buys or uses, which signal likely preferences or constraints (e.g., buying from high-end brands suggests willingness to pay for quality; sustainability-minded shoppers may prefer eco-friendly goods).
Day in the life: walk in their shoes for a day to translate data into lived experience; helps contextualize needs and behaviors.
Biggest fears and motivators: identify what keeps end users up at night and what drives their priorities; often captured by listing concerns and scoring priorities.
Challenges and pain points: the problems your product solves; link to proxy products to ensure alignment with customer needs.
Table 7.3: Additional Ideas for Building a Persona
Challenges and pain points: connect problems to how your offering solves them; tie to proxy products.
Demographics: age, gender, salary, location, education, family, ethnic background.
Goals and challenges
Values and fears
Pain points or complaints
Hobbies
Where they get their news or information
Shopping preferences (online vs in-person)
Apps used most frequently
Day in their life
Work and/or school activities
Relationships with friends
Culture
Practical Persona Development: Key Takeaways
A persona is a story about the most likely buyers, built from interviews and research.
Simple demographics and psychographics are not enough; combine with day-in-the-life, goals, fears, and pain points to predict behavior.
Personas help you design targeted messaging and product features that resonate with the intended buyers.
Real-World Examples of Personas and Platforms
Cooper: a fictional persona created for Alimento (a pre-cooked meal delivery app) to understand cook/chef partners.
Environmentally conscious: Cooper may expect recyclable or compostable packaging.
Family life: Cooper is a stay-at-home dad, so scheduling and autonomy are important; cooks must choose when to participate on the platform.
Relationship with technology and free time: how much and how they engage online; social media usage; health and well-being values.
Quotes and interview data used to shape the persona.
DishDivvy: Los Angeles-based platform linking home cooks with customers; 500 cooks and 10,000 users in California; expansion plans to Texas, Illinois, Washington, D.C.
Takeaway: Personas help attract talent and customers by highlighting practical preferences and constraints, enabling better product-market fit.
Customer Journey Maps: Connecting Data to Customer Experience
A customer journey map is a visual representation of customer experiences across multiple touchpoints.
Purpose: to gain a holistic view of the customer experience, identify pain points, and design a better overall experience.
Five typical stages of customer interaction with a company: Discovery, Research, Purchase, Delivery, After sale.
The map helps you understand the consumer’s point of view and the emotional state at each stage.
Benefits of journey mapping:
Presents a clear picture of how customers interact with your business, including goals, needs, and expectations.
Clarifies what customers think and feel by identifying positive and negative emotions.
Confirms whether the journey proceeds in a logical order and highlights gaps between desired vs. actual experiences.
Helps connect with customers on an emotional level and address key pain points.
A journey map is not static; it should be revisited and updated over time as you learn more about customers.
Journey Mapping in Practice: A Retirement Party Analogy
Use a familiar event (retirement party) to illustrate the customer journey from the guest’s perspective.
Touchpoints in planning the event include invitations, reminders, arrival, etc.; guests may ask questions at each stage (dress code, parking, snacks, etc.).
The exercise demonstrates how understanding the guest experience can improve event planning and overall satisfaction, illustrating the value of empathy in journey mapping.
Elements of a Customer Journey Map (Why It Matters)
Five stages of interaction: Discovery, Research, Purchase, Delivery, After sale.
Considerations at each stage:
What are the buyer’s goals and tasks?
What knowledge does the buyer want or need at each stage?
What pain points might occur, and where does your company disappoint?
What are the positive moments (happy points) that meet or exceed expectations?
What emotions are experienced at each stage?
What would make the experience exceptional (wish list)?
The map should capture not just activities but the emotional journey, enabling you to design experiences that satisfy customers’ goals and feelings.
Confirming Findings: Data Sources for Journey Maps
Website analytics: provides location data, traffic volume, page-by-page interactions, and drop-off points.
Social media tools: e.g., Social Mention helps gauge how your brand is discussed and whether sentiment is positive or negative; useful for capturing ongoing customer feedback.
Direct customer contact: interviews and conversations provide qualitative insights that complement analytics.
Influencers: identify who influences decisions and how their opinions shape perceptions.
The Role of Influencers and Ethics in Customer Psychology
Influencers can shape decisions even when they are not directly involved in the product’s use.
Ethical considerations: protect against manipulation, ensure accuracy in messaging, and avoid unnecessary manipulation of consumer fears or misinformation.
Brand sabotage risk: social media can amplify negative feedback; prepare crisis management and responsive communication strategies.
Activity and Next Steps
Video Activity 7.1: Entrepreneurship in Action — The Buying Process Mindshift: Create a Customer Journey Map.
Next section: Do the activity to apply journey-mapping concepts to a real or hypothetical product.
Quick Recap: Why Customer Psychology Matters for Entrepreneurs
Understanding the customer bubble and the six actors helps identify who to target and how to influence decisions.
Personas translate research into practical design and messaging that resonates with buyers.
Journey maps translate data into an empathic, end-to-end view of the customer experience, revealing opportunities to create value and reduce friction.
Data sources (analytics, social listening, direct feedback) should be used to validate and refine personas and journey maps.
Ethical considerations and ongoing iteration are essential to maintain relevance and trust in your customer relationships.
References and Concepts Mentioned (Conceptual Summary)
Subconscious decision-making: 95\% of purchases are subconscious (Zaltman).
Six actors in buying process: End users, Influencers, Recommenders, Economic buyers, Decision makers, Saboteurs.
Persona components: Demographics, Psychographics, Proxy products, Day in the life, Biggest fears and motivators, Challenges and pain points.
Additional persona ideas: Goals, News sources, Shopping preferences, Apps used, Day-in-life, Culture, etc.
Journey map stages: Discovery, Research, Purchase, Delivery, After sale.
Benefits of journey maps: empathy, structured insights, identification of gaps, emotional resonance, value opportunities.
Real-world examples: Lynja (Lynn Yamada Davis), Tanishq backlash, Alimento Cooper persona, DishDivvy platform.
Learning Objective 7.2
Differentiate customer types entrepreneurs encounter.
Understand how customer psychology shapes buying decisions and design strategies.
7.2 Customer Psychology: Overview
Customer psychology studies customer wants, needs, decision-driving thoughts/emotions, and external influences (friends, family, media).
Key insight: most purchasing decisions are subconscious. Gerald Zaltman (Harvard) states about 95\% of purchasing decisions are subconscious.
Entrepreneurs gain psychological insights to meet customer needs and improve service.
Actors in the Buying Process (Figure 7.1)
The "customer bubble" involves multiple influential actors. Entrepreneurs must consider all roles.
Six actors in the buying process:
End users
Influencers
Recommenders
Economic buyers
Decision makers
Saboteurs
Roles can overlap; a single customer might play multiple parts depending on the business.
Six Actors in the Customer Bubble (Table 7.2 context: video game example)
End users: Use the product, judging its value.
Example: Teen playing a video game.
Influencers: Sway opinions with reach or authority.
Example: Celebrity endorsing the video game.
Recommenders: Evaluate and share opinions publicly (bloggers, experts).
Example: Instagrammer posts positive reviews of the game.
Economic buyers: Decide to stock or purchase in large volumes (retailers, corporate).
Example: GameStop buyer stocks the video game.
Decision makers: Authorize purchases, higher in hierarchy (CEO, parents).
Example: Gaming company CEO approves buying the game from a designer.
Saboteurs: Veto or slow purchases; can intentionally harm brands.
Example: TikTok influencer voices concerns, causing brand damage via social media.
Notable risk: Social media-driven brand sabotage can be loud and damaging (e.g., #BoycottTanishq in 2020).
Influencers and Modern Marketing Dynamics
Influencers with large followings significantly impact purchase decisions.
Social media influencers who build online credibility are increasingly central to marketing, alongside celebrities, journalists, and analysts.
Example: Lynn Yamada Davis (Cooking With Lynja) gained millions of followers, securing deals with major brands (McDonald’s, Amazon, Chobani).
Takeaway: Identify key actors in your market and tailor outreach to move the needle for your product.
Customer Personas: Definition and Purpose
A persona is a semi-fictional representation of your ideal customer, built from research.
Purpose: Connect with your target audience and tailor messaging; it represents a "most-likely buyer type."
Personas engage teams, guide product development, and anticipate buyer behavior.
Demographics and psychographics alone are insufficient; over-reliance creates an incomplete view.
The Six Core Components of a Persona
Demographics: Define age, gender, salary, location, education, family, ethnicity.
Useful for targeting end users, but insufficient to predict behavior, potentially misleading.
Psychographics: Uncover attitudes, values, fears, aspirations, beliefs; deeper motivations.
More predictive but harder to obtain; social media offers clues but not deep fears.
Proxy products: Reveal likely preferences or constraints through other products bought/used (e.g., high-end brands suggest willingness to pay for quality; eco-friendly preferences).
Day in the life: Translate data into lived experience to contextualize needs and behaviors.
Biggest fears and motivators: Identify core concerns and priorities that drive end users.
Challenges and pain points: Highlight problems your product solves; connect to proxy products to align with needs.
Table 7.3: Additional Ideas for Building a Persona
Challenges and pain points: Explain how your offering solves them; tie to proxy products.
Demographics: Age, gender, salary, location, education, family, ethnic background.
Goals and challenges
Values and fears
Pain points or complaints
Hobbies
Where they get their news or information
Shopping preferences (online vs in-person)
Apps used most frequently
Day in their life
Work and/or school activities
Relationships with friends
Culture
Practical Persona Development: Key Takeaways
A persona tells the story of most likely buyers, based on interviews and research.
Simple demographics/psychographics are insufficient; combine with day-in-the-life, goals, fears, and pain points to predict behavior.
Personas help design targeted messaging and features that resonate with buyers.
Real-World Examples of Personas and Platforms
Cooper: Fictional persona for Alimento (meal delivery app) to understand cook/chef partners.
Environmentally conscious: Expects recyclable or compostable packaging.
Family life: Stay-at-home dad values scheduling and autonomy; cooks control participation.
Tech/Free time: How they engage online, social media use, health/well-being values.
Quotes and interview data shape the persona.
DishDivvy: Los Angeles platform connects home cooks with customers; expanding to Texas, Illinois, Washington, D.C.
Takeaway: Personas attract talent and customers by highlighting practical preferences and constraints, enabling better product-market fit.
Customer Journey Maps: Connecting Data to Customer Experience
A customer journey map visually represents customer experiences across multiple touchpoints.
Purpose: Gain a holistic view, identify pain points, and design a better overall experience.
Five typical stages: Discovery, Research, Purchase, Delivery, After sale.
The map helps understand the consumer’s point of view and emotional state at each stage.
Benefits of journey mapping:
Presents a clear picture of customer interaction (goals, needs, expectations).
Clarifies customer thoughts and feelings by identifying positive/negative emotions.
Confirms logical journey progress, highlights gaps between desired vs. actual experiences.
Connects with customers emotionally and addresses key pain points.
A journey map is not static; revisit and update it as you learn more.
Journey Mapping in Practice: A Retirement Party Analogy
A retirement party illustrates the customer journey from a guest’s perspective.
Touchpoints include invitations, reminders, arrival. Guests ask questions at each stage.
The exercise demonstrates how understanding guest experience improves event planning and satisfaction, showing empathy's value.
Elements of a Customer Journey Map (Why It Matters)
Five stages of interaction: Discovery, Research, Purchase, Delivery, After sale.
Considerations at each stage:
What are the buyer’s goals and tasks?
What knowledge does the buyer want or need?
What pain points might occur? Where does your company disappoint?
What are the positive moments that meet or exceed expectations?
What emotions are experienced at each stage?
What would make the experience exceptional (wish list)?
The map captures not just activities but the emotional journey, enabling design of experiences that satisfy customer goals and feelings.
Confirming Findings: Data Sources for Journey Maps
Website analytics: Provides location data, traffic, page interactions, and drop-off points.
Social media tools: (e.g., Social Mention) Gauge brand discussion and sentiment (positive/negative); captures ongoing feedback.
Direct customer contact: Interviews and conversations provide qualitative insights, complementing analytics.
Influencers: Identify who influences decisions and how opinions shape perceptions.
The Role of Influencers and Ethics in Customer Psychology
Influencers shape decisions even without direct product use.
Ethical considerations: Protect against manipulation, ensure message accuracy, avoid misinformation.
Brand sabotage risk: Social media amplifies negative feedback; prepare crisis management and responsive communication.
Activity and Next Steps
Video Activity 7.1: Entrepreneurship in Action — The Buying Process Mindshift: Create a Customer Journey Map.
Next section: Do the activity to apply journey-mapping concepts.
Quick Recap: Why Customer Psychology Matters for Entrepreneurs
Understanding the customer bubble and six actors identifies who to target and how to influence decisions.
Personas translate research into practical design and messaging.
Journey maps translate data into an empathic, end-to-end view, revealing value creation and friction reduction opportunities.
Data sources (analytics, social listening, direct feedback) validate and refine personas and journey maps.
Ethical considerations and ongoing iteration maintain relevance and trust.
References and Concepts Mentioned (Conceptual Summary)
Subconscious decision-making: 95\% of purchases are subconscious (Zaltman).
Six actors in buying process: End users, Influencers, Recommenders, Economic buyers, Decision makers, Saboteurs.
Persona components: Demographics, Psychographics, Proxy products, Day in the life, Biggest fears and motivators, Challenges and pain points.
Additional persona ideas: Goals, News sources, Shopping preferences, Apps used, Day-in-life, Culture, etc.
Journey map stages: Discovery, Research, Purchase, Delivery, After sale.
Benefits of journey maps: empathy, structured insights, identification of gaps, emotional resonance, value opportunities.
Real-world examples: Lynja (Lynn Yamada Davis), Tanishq backlash, Alimento Cooper persona, DishDivvy platform.