Using Psychology To Optimize Customer Experience and Marketing Effectiveness With Mark Levy

Intro: 00:00

Welcome back to the Response Drivers podcast, where we feature top marketing minds and dig in to their inspiring stories. Learn how these leaders think and find big ideas to push your results and sales to the next level. Now let’s get started.

Rick Rappe: 00:19

Hey, I’m Rick Rappe, host of the Response Drivers podcast. Here I dive deep with marketing experts and innovators to learn how they approach targeted marketing and use data driven strategies to acquire and retain customers. We’ll talk about what’s working, what’s changing, and how we can stay ahead in an evolving marketing landscape. 

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Our goal is to fully optimize your marketing performance to drive more sales and exceed growth expectations. RPM delivers smarter, more profitable direct mail solutions, so you can turn your direct mail programs into a predictable, efficient sales channel. Check out rpmdm.com to learn more. 

Well, my guest today is Mark Levy. 

Mark is a 25 year product and customer experience expert. He’s led and digital transformation at major companies like Comcast, AT&T, Nokia and Jaguar Land Rover, and currently heads Product and CX at a leading US fiber internet provider. Mark is the author of The Psychology of CX 101, The Accountability Team Handbook, and 365 Days of Accountability. He publishes two newsletters, Decoding Customer Experience and DCX AI Today, read by CX leaders worldwide. Thank you for joining me today, Mark.

Mark Levy: 01:52

Thanks, Rick. I really appreciate the opportunity to talk with you.

Rick Rappe: 01:57

Well, to start, could you walk us through your career journey from your earlier roles in telecom, digital experience and product to your current role?

Mark Levy: 02:06

Sure, absolutely. So my career is pretty varied, started out in the music business, then moved to the film business, then the film music business and then technology and. Along the way. Definitely. Being being pretty much a geek myself, you know, the technology kind of went over and started working in experience and digital experience and strategy around digital experience in in the 2000 and working with a number of different brands.

Ended up consulting for Comcast at the time that they were starting up their Xfinity mobile business back in 2015, ended up joining that company full time and working my way up within a few years to head up their digital experience practice for the entire business.

Rick Rappe: 03:03

You wrote The Psychology of CX 101 to make behavioral science usable for marketers. What gap were you trying to fill between traditional marketing and customer psychology?

Mark Levy: 03:15

Yeah, well, so I, I approached this book definitely for practitioners, for marketers, for UX, UX designers, product teams, really with a goal of helping everyone focus on the why of what customers do. So most marketing and most experience focuses on what on what they do. Like clicks, opens, conversions, but not really why they do it. So I wanted to close that gap, and I’ve been working for years with my teams to bring psychology and behavioral science into our conversations every time we look at, you know, how we’re designing a page, how we’re presenting an offer, right? We want to be thinking about how that customer is going to see us.

Do they trust us already? How would we say that if they don’t trust us or they don’t know us? How do we present to them to try to get, get get the the right response? And psychology gives us the blueprint for why people trust or hesitate or buy. But most teams don’t apply it systematically. 

So I built the book really as a playbook, right? It’s it’s not a book you necessarily read from one end to the other, but really keep as I do right here on my desk for an easy access to design experiences from the brain out. Right. So how do I look at my onboarding experiences? How do I look at. 

AI as it comes into play now and what customers are thinking and how do I build that? So the book is 101 psychological principles that that range from, you know, how people think to the emotions to how they how how to motivate and engage, how to design, you know, for customers psychology, how to handle choice and persuasion. And in that area, I really focus on ethics as well. So it’s looking at at how people use these, these principles in an ethical manner. Right. 

There’s certainly opportunities to to not. And my focus is really on on helping people see the, the opportunities to build better experiences, better relationships. And then I also have a section on AI and digital psychology, you know, kind of where tech meets that, that human behavior.

Rick Rappe: 05:52

Yeah. Would you say your focus has been more on digital experiences and that that end of the spectrum.

Mark Levy: 05:59

No, I mean, within the book, I, I go all over. It’s it’s everything from, you know, looking at there’s there’s many, many stories of different companies, from retailers to hotels to banks to to digital sass experiences, those kind of things. And, and really, the principles can work for, for any business. Everyone has a kind of an LBGT kind of process, right? How do I train my customers on what they need to know in order to make the decision to buy?

How do I then once they how do I help them buy? How do I then get them to use the product or service? If there’s issues, how do I support them? So it all works really for anyone?

Rick Rappe: 06:50

Have you studied much of of the differences between how people trust Like for say for example, digital marketing versus traditional direct mail marketing.

Mark Levy: 07:01

Yeah, I think that, you know, one of the things I’ve seen is, is the evolution of digital to be much more personalized. And there’s there’s some challenges with the trust factor in terms of, well, I was on this website and all of a sudden I’m seeing ads that are, you know, that are tracking me, so to speak.

Rick Rappe: 07:22

Intrusive. Yeah.

Mark Levy: 07:23

So so I could be interested in it, but it could be a little creepy that it tracks me. So I think the the trust effort and that’s the big piece of the AI evolution as well, is, is we have to really focus on, on on trust and empathy and transparency all the way along for both. I think for any part of marketing and or AI.

Rick Rappe: 07:51

We’ve got some good research recently from MIT and some other articles that I’d be happy to share with you that talk a little bit about the the trust factor around direct mail and how it’s it’s much higher than digital right now.

Mark Levy: 08:05

So I would think it would be I would think it.

Rick Rappe: 08:07

Would be something to keep in mind. Yeah. You say your product, you say in the book your product isn’t the problem. Your customer’s brain decides before they even read your headline. How should marketing teams rethink messaging and design around that particular insight?

Mark Levy: 08:26

Yeah, yeah. Well, to me this really means the first impression isn’t really visual. It’s psychological. And in the first 50 milliseconds, the brain judges whether something feels safe or credible or clear. Right?

You don’t even realize it. It happens so fast. So, so clarity beats creativity in that moment. I know a lot of us want to have a beautifully designed page with lots of or DM but you know clarity, right? What’s the message? 

What’s the what’s the benefit. So if you’re landing page or subject line the message on the DM, like if that forces people to think too hard, you’re going to lose them. So I tell teams, really your design isn’t about art direction. It’s really trust direction.

Rick Rappe: 09:14

Yeah, I always heard as a young marketing person coming up that, you know, people scan marketing messages for what’s in it for me immediately, like, that’s what they’re looking for. And if there’s not something that immediately grabs them, grabs them, that is is there for them, then they move on and obviously go on to the next thing. Yep. What are one of the 1 or 2 of the top psychological principles that every marketing leader should understand right now?

Mark Levy: 09:40

Yeah, well, it’s hard to choose the good ones, but, you know, because there’s 101 in the book. But I would I would say two big ones.

Rick Rappe: 09:47

You have to cherry pick.

Mark Levy: 09:48

Yeah, I’d say two big ones are cognitive fluency and loss aversion. And the reason I picked those is sort of the fluency says, you know, if it feels easy. If it feels true. So simplify copy visuals and navigation similar to what we’re talking about there. If you have cognitive overload.

Right. Too much information. You know, creative design with lines all over the place and things that are like moving people’s eyes. All they’re not they’re not focused on it. You really want to focus on on simplicity and then loss aversion really. 

It says, you know, people are twice as sensitive to losses as to equivalent gains. So instead of saying something like save 10%, you know, you could use something like, don’t miss your 10% savings. Right. So kind of lean into that. Do it with ethics. 

Right. Don’t don’t try to like like, you know, create some some loss that isn’t real. But there’s different ways to frame these types of messages. And I think both are small shifts, but they can really drive huge revenue impacts.

Rick Rappe: 10:53

Yeah, we’ve done a lot of testing around that kind of offer positioning with for our clients, and it’s surprising how big of a difference you can get in response rates and conversion rates, just based on the same offer but but framed differently. It’s really interesting. So important these days to be a data driven marketer and to actually test and learn. So that’s one of the areas that we’re definitely focusing on and interested in. You described cognitive fluency.

That the process has to be easy. And and easy is equal to trust. How does simplicity how does simplicity translate into measurable business outcomes.

Mark Levy: 11:38

Yeah. So we’ve tested this across dozens of companies. When you remove complexity you increase confidence. You know, we was working with a company years ago, like one, one team. They cut their sign up form from 12 fields to four and completions rose 28%.

Right. Simplicity. And so I do talk to to my team all the time. I was on a experience review earlier before this call. And very much same type of concept. 

It’s like how much are we asking for the customer at this point, at this point, at this point? So you know others? It’s also in the way that you you write and what, what reading level, right. You write at. So if you, you rewrite the headlines at an eighth grade reading level, you know, time on the page increases, bounce rates drop. 

Right? You’re you’re you’re capturing more of an audience. And I don’t call it dumbing down. It’s really removing friction. Right. 

It’s focusing on how can we how can we serve that customer so that our message gets across and drive that drive that trust.

Rick Rappe: 12:47

So for example, if an internet and cable company wanted to market multiple products at the same time in in a piece or put put forth like a good, better, best offer, would you recommend not doing that and kind of focusing in on one offer at a time and keeping it very simple?

Mark Levy: 13:09

Well, there’s, there’s I think there’s different options. So like when you’re looking at the, the speed options, let’s say for internet or you’re looking at. Yeah, yeah. Let’s say you’re looking at speed options. Right.

You do want to put you want to kind of anchor where you think you want this customer to to go, but then provide options that might be above and below. So I think, you know, keeping it simple, not showing, you know, ten options at once, but maybe 3 or 4 in a in an email or a direct mail where we’re sending something out. I’d rather keep it to like, one message. Very clear. This is what we’re offering. 

If there’s something, you know, extra or related to it, maybe put it on the back and try to, you know, give it. But but really be very focused on, on that, that single product. And because otherwise you still, you know, from a testing perspective, you don’t know what the, the real response is. Like, what the reason is that, that, that they responded to it so that that’s that’s how I would put that into play.

Rick Rappe: 14:20

Many brands invest in performance marketing, but they ignore emotion. Why is the emotional connection still the most powerful growth strategy?

Mark Levy: 14:30

Yeah I because emotion drives memory right. And customers remember how we make them feel. Right. They may remember a bit of what we say, but it’s really how they how they feel, you know, do they feel confident? Do they feel like we we’re we’re, you thinking about them that we have their their best.

Desires in mind. And in the book, I talk about the peak end rule, where people judge experiences based on the emotional high points and how it ends. And really, when we’re looking at journeys, it’s important, I think, to design with those moments, design those moments intentionally, right? A moment of surprise or relief and a positive finish really makes a difference. Some people try to like, you know, optimize every single step along the journey, but in the end, it’s really like, how do they feel at the end? 

And was there a moment that kind of like when there’s a moment where maybe something gets filled in automatically for you or, you know, there’s there’s just an element of it that that says, you know, we were thinking about you and as we designed this, but then really how it ends and making sure that that it’s, you know, a positive experience at the end and and, you know, you can outcompete brands spending 1010 x on media if you just focus on the peak and the end.

Rick Rappe: 15:55

When we’re talking about and thinking about emotions in direct mail marketing, we’re oftentimes a product has like multiple different ideas, you know, ways you could take it. And we obviously like to do testing and test things head to head. What’s your impression of like a fear approach versus a sort of much more positive approach. Do you have any bias towards one or the other.

Mark Levy: 16:21

Fear in terms of of loss or.

Rick Rappe: 16:23

Yeah. Like fear. Yeah. Fear of loss, like insurance would be a good example if I was marketing for insurance. Obviously you can take a fear sort of approach or you can take a a positive approach.

Mark Levy: 16:38

Yeah. I mean personally I would go for the positive approach. I think it I mean research does show that people will, you know, respond emotionally to this, you know, to loss, to a negative in that situation. It’s like, do you show the the the storm coming in, or do you show the safeness of you in your home as the storm passes kind of thing? Personally, I’m more for showing you that you’re protected and safe in in light of something that might go on as opposed to going, here’s the, you know, the something to be afraid of.

Rick Rappe: 17:16

Yeah.

Mark Levy: 17:17

Just me.

Rick Rappe: 17:19

Well, I guess sometimes, now that I think about it, too, we often take people through a little bit of fear to sort of set the stage and frame the, the risk, and then we take them to salvation and what it feels like to have peace of mind and try to end on that positive note and then get them to take action from there. Trust feels harder to earn than ever. And how can marketing teams use principles like social proof or identity alignment to rebuild credibility with skeptical audiences?

Mark Levy: 17:55

That’s a great question. I think it’s, you know, these kind of generic trust signals, like, customers love us, that that doesn’t mean anything. The key is really it’s one of my other principles in here, identity alignment, right. Showing people, showing that people like me have already succeeded with you. Right.

And, you know, we’ve run tests where testimonials were segmented by persona. You know, I think parents, freelancers, students like we broke them up and conversion tripled when we were more specific. And so trust isn’t about saying believe us, right? It’s about showing people like, believe people who are like you. And and I think that that drives a lot more trust when people can see themselves reflected back.

Rick Rappe: 18:47

Loss aversion and progress framing come up throughout your book. How can marketers ethically use these to drive engagement and retention?

Mark Levy: 18:56

Yeah, so I think and I go in pretty deep in here on on ethics. I just think it’s it’s really, really important. You know, you can read most of these psychological principles two ways, right. You could say decoy pricing. I want to use that.

You know, where basically you have a higher price for something that you know isn’t going to sell in order to sell the lower price. One. And you could use that, you know, in, in for good and for, you know, for kind of manipulation. Rather people focus on, you know, what? What is the right way to present an offer to, to a customer in a way that that is is ethical and not manipulative. 

You know, and there’s sort of this idea to that that, you know, you can keep customers motivated, right, but not pressured. So as a way of like if you think of like Duolingo, right, like their, their, their goal is to keep you using that app on a regular basis to learn the language. It’s a benefit to you, right? They they do that with, you know, every day, every lesson. There’s like this celebration, right? 

It’s something that shows and and that shows that you’re on a progress. You’re you’re making progress. And so I think it’s really important to, to be able to show people that they’re making progress and use loss framing to like, you know, protect their investment. So like like keep your benefits active is more powerful than like renew now, right. So there are some ways where you might lose something. 

But but there is a benefit to to keeping it. And I think it’s really about, you know, reinforcing the value that they’ve created, not manufacturing urgency. Right. Like, oh, you’re going to lose this, but it’s like, here’s what you’ve created so far. Let’s keep going.

Rick Rappe: 20:57

That makes perfect sense. We’ll take some of those ideas and put them to work right away in our renewal and former customer programs. And an AI is changing the customer journey very fast. So what does AI psychology mean for marketers designing chatbots personalization or automation.

Mark Levy: 21:21

Yeah. So quick story. So so this weekend I had two experiences with voice AI. One was with Sonos and one was with a restaurant. I was making reservations with the restaurant.

It was my birthday. We wanted to bring a cake and we we called the restaurant to see if we could bring the cake and the. It answered, and the voice we. At first we thought, oh, is this an answering machine? And then it was asking us questions and we’re like, oh! 

I turned to my wife. I go, this is AI. I was like, this is, this is so keep we’re.

Rick Rappe: 21:58

Talking to the robots.

Mark Levy: 22:00

Yeah. I was like, keep going, let’s see what happens. And she said, she said, so I’m coming for I guess it recognized the phone number based on the reservation. And we said, we’re coming for a birthday and we want to bring a cake and is there a cake cutting fee? And it responded by wishing me a happy birthday and explaining that there was no fee for cutting the cake, and that they would put a note on the reservation so that the the servers would know we were going to bring a cake and they would support it.

It’s phenomenal. Like now. What was interesting, though, is it was a little weird because it didn’t it didn’t immediately tell us it wasn’t transparent that it was an AI. Right. And so I think it’s a really important and in fact, California just passed a law actually about this, which is that that AI has to be more transparent in those situations. 

So we’ll see where that goes. But yeah, it was a it was it was a little bit weird, you know, because trust is so important with these with these solutions. The experience I had with Sonos was was somewhat similar, was asking me questions about the issue that I had and it immediately and I could tell it was a it was an AI. It told me it was a, it was an AI at the beginning. And then it immediately said, I can’t help you, let me get you an agent. 

So it got me right to a human. Like that’s a great experience that that built a tremendous amount of trust and confidence. So like, you know, I think it’s important if a bot says I’m an assistant and can help you with your order, but I’ll hand you off, right? That trust goes up. And I think that that’s that’s really important. 

As we move forward, we’re going to see a lot more of this type of experience, not just at the, you know, the front desk, so to speak, but even in the call centers. Right. These, these types of solutions, these types of voice experiences tied to memory that that know you as a customer and the products that you have and the experiences that you’ve had can have conversations with you and resolve issues. Right. Resolve probably tier one issues. 

But then if they can’t, they should they should pass you off. So I think the the we’re just at the beginning of this and what I, what I really talk about in the book is focusing on trust, empathy and transparency. Huge, huge, important aspects of everything you do with AI. Anything you’re putting up in front of, of customers or interacting with customers is a big concern about privacy, about what are you doing with my data? Those kinds of things. 

And so, so as marketers, as people, UX, whatever it might be like being being transparent. And that’ll build trust more and more with people, you know, not not trying to get around it. Right. These are solutions that we hope will be of value to customers. And we don’t want them just to to bypass them because, you know, they don’t want to talk to a to an AI.

Rick Rappe: 25:10

Yeah. As a consumer, I’ve, I’ve definitely run into AI solutions that work really well and give you a positive, you know, a positive outcome and a positive feeling at the end. And I’ve also run into the ones that are super difficult, like where you can’t get what you need figured out, and then you can’t get out of the phone tree and find a real human being to talk to. And I wonder if consumers are just gonna. Well, if they’re going to be open minded.

I think us as marketers and product people were like, we’re open minded to try new things and and to experiment a little bit and see how it goes. But I wonder if consumers will judge it based on the lowest, the lowest common denominator experience that they’ve had. And then, you know, kind of shut down a little bit. I guess we’ll see.

Mark Levy: 25:56

I yeah, I think I think more and more people I mean, look at those ads that that Gemini does on, on TV, right. They’re they’re all about talking have a conversation with AI. So I think there’s a lot more as people get more comfortable with that. Same with ChatGPT and others, that that these types of experiences will will be accepted. But there are people I mean, my my wife is someone who, if she has an issue, she wants to talk to a human.

I, on the other hand, want to go as far away as I can and I will try everything I can. Digital, online searches, whatever it is. So because I think I can, I can get it faster or whatever. She wants to be able to ask follow up questions. She wants to make sure. 

Right. So there’s there’s there’s a balance. And and you know, businesses are going to need to be able to deliver for, for for all different types of customers.

Rick Rappe: 26:49

Yeah for sure. Well, I know we’re going to see an explosion of AI agents and AI voice applications and things in the next 3 to 5 years. I think it’s going to be transformative in a lot of industries. So it’s definitely something that we have to learn to work with and, and optimize as, as as we go. You dedicated a section in your book to influence with integrity.

So how do you draw the line between persuasion and manipulation in marketing? You mentioned that in one of your previous answers, and I just wanted to circle back on that.

Mark Levy: 27:25

Sure. Yeah. So so I use a simple three question test. Does it respect customer autonomy? Does it build long term trust and does it deliver real value?

Right. It’s really important if you if you answer no to any of those, you’re probably crossing into manipulation. And I think the most effective influence actually empowers customers. And it helps them make better choices, not trick them into temporary ones. And those questions really help to to solidify if anything looks off, feels off. 

You know, it ends up feeling more like manipulation. But that that’s my that’s my go to.

Rick Rappe: 28:07

Can you state those three questions one more time for me?

Mark Levy: 28:10

Yeah, sure. It’s does it respect customer autonomy? Does it build long term trust and does it deliver real value?

Rick Rappe: 28:19

Gotcha. Those are great questions to a great filter to put things through and see how how things fit. Yeah. If every marketing leader listening today can apply just one idea from your book. What principle would move the needle the fastest?

Mark Levy: 28:39

Yeah, I think it goes back to what we talked about at the beginning. It’s designing for clarity over creativity, because if people don’t instantly understand what you do, they’ll never stay long enough to care. So start by removing confusion. That’s like just the silent killer of growth and performance. And once the brain feels safe, right then emotion, persuasion, and loyalty can actually work.

But if you if you throw too much out at once, you’re not going to you’re not going to get the person through the door to be able to, to meet them. You know where they are.

Rick Rappe: 29:17

Interesting. Yep. Great advice. Thank you so much. Well, it has been a real pleasure talking with you and learning more about consumer experience and psychology.

And I look forward to reading your book. I will be buying it. And if anybody else is interested in it, be sure to go to Amazon right now and buy the book The Psychology of CX 101. If people want to reach out to you and get in touch, what’s the best way for them to reach out and get in touch with you?

Mark Levy: 29:46

Yeah. So probably the best is LinkedIn. Just look up Mark Levy. Yeah, that’s the best way.

Rick Rappe: 29:57

Perfect. Well, Mark, thank you again for your time and sharing your expertise today. And I’ll let you go. Bye for now.

Mark Levy: 30:04

Thanks, Rick. Appreciate it.

Outro: 30:06

That’s a wrap for this episode of Response Drivers. Thanks for tuning in. If you found today’s insights valuable, make sure to subscribe so you never miss an episode. And if you’re enjoying the show, we’d love it if you left a review. Got a question or a topic you’d like us to cover?

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