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How people cluster experiences in their life
People’s expectations of a service are shaped by their previous experiences with similar or related services. It is because, for experiences that elicit or are triggered by similar needs or expectations, the mind automatically groups them into the same “cluster”. Within a cluster, past experiences and people’s own needs are constantly shaping their expectations of similar services in the future. That’s how the mind organises and interprets the world of services. Service providers which understand how people’s minds cluster service experiences have a huge competitive advantage.
Five clusters that organise people’s experiences
There are five distinct clusters in people’s minds. Each cluster contains experiences that arise from or fulfil similar needs and expectations. People in developed economies tend to understand services through the same clustering. While there are exceptions as experiences are subjective, the following five clusters are nevertheless very useful in understanding people’s expectations and behaviour when they interact with service providers.
Essentials – The services people need and expect
The first cluster contains experiences with essential services supporting people’s daily lives in a developed economy: financial services, insurance, security, and connectivity. Examples of these must-haves include renting an apartment and taking care of one’s own health. Service providers offering these experiences are banks, insurance companies, telecoms and security system providers. These services must be reliable, simple and transparent, so that people have the confidence and peace of mind to go on with their lives and pursue other more advanced activities.
The financial services provider Gjensidige decided to develop an insurance and banking proposition for young people. They decided to start off with travel insurance. When people plan a holiday or a trip, the connection to their banks is almost immediate. Insurance resides in the same service domain. The offering adhered to the three fundamental rules that guide the Essential service domain: simplicity, transparency and reliability. These three together provide the confidence people look for in this specific service cluster.
Wellbeing – How people feel about their personal and social lives
The second cluster contains experiences related to personal and social wellbeing, and the emotional aspects of people’s lives: education, employment, healthcare, social services, social interactions, and religion. People’s experiences in this cluster are generally in terms of positive or negative emotion, feeling happy or unhappy and being hopeful about the future or not. Together they represent the possibility for personal development, which is determined by the availability of specific services, which in turn is determined by the society’s standards and culture.
Sunderland City Council in the UK decided to invest in moving people out of long-term unemployment. In most of these cases, the unemployed people have social and health issues that affect their capacity to go back to work. These are all aspects that reside within the wellbeing sphere. In order to improve one element, all other elements need to be taken into consideration. Sunderland City Council proved that addressing the complete wellbeing of multi-problem individuals leads to successful reintegration into work and life at a fraction of the costs.
Household – How people organise and run their everyday lives
The third cluster contains all experiences that relate to running a household: utilities, shopping, mobility, home maintenance and cleaning. Services offering these experiences are purely “operational”. The criteria of good services in this cluster are convenience, accessibility and predictability of quality. Another important theme is Planning, as people need accurate and timely information to manage a household smoothly.
Interests – what excites, motivates and entertains people
The fourth cluster contains experiences related to personal interests and hobbies: travel and leisure, sports and fitness, arts and entertainment. These are activities that people enjoy and feel motivated by. They often contribute to personal growth. A common challenge in this cluster is how to attract people and then keep them interested in and committed to a particular service.
North Norway Travel wanted to attract more visitors to North Norway. The consortium of hotels, activity providers, shops and the tourist centre focused mostly on entertaining tourists when they arrived in Tromsø. By shifting the focus from people already interested in visiting Tromsø to understanding interests of the broader public, such as leisure, travel, entertainment, sports, North Norway Travel can better attract people with specific travelling interests, like seeing the Northern lights or polar bears, as well as people with more general goals such as having a family adventure or outdoor activities.
Obligations – What people feel obliged or are forced to do
The fifth and last cluster contains experiences arising from exercising rights and obligations. They are mostly government-related services and activities, such as paying taxes or being compliant with the law. Experiences and behaviour in this cluster are highly dependent on the governmental system’s maturity and the political and cultural context in which the user’s society operates.
Responsibility and trustworthiness are the key criteria of evaluating services in this cluster. People must feel responsible for their obligations, and trust that the service providers are doing their job properly. An interesting aspect of this cluster is the underlying necessity of informing and educating people about the benefits they derive from these obligations.
Citizens must fulfil obligations such as paying taxes and getting permits. That means, for instance, tax authorities have to accept that citizens’ perception of the department is lumped together with their perceived levels of bureaucracy of the government as a whole. Therefore, in order to nudge the general public to perceive all departments differently, they should reframe what these public services do, and inform and educate the public about it.
Nudge behaviour based on how people cluster experiences
By looking at how experiences are clustered in people’s minds, service providers can dig deeper into people’s needs and expectations. When service providers know which cluster of experiences they belong to, it becomes clear with which their own services are being compared in people’s minds and get a better understanding of the rationale behind specific customer behaviours. Customer expectations are a product of previous service experiences from all sectors that belong to the same cluster. This insight helps service providers get a firmer grasp of customer expectations and enables them to exceed them, to ultimately achieve a significant competitive advantage.