Finite state models of a customer’s behavior

Product experiences that map existing human behavior are often successful, as customers do not need to change behavior to be able to use them. Based on this hypothesis, I’ve used finite state models as tools to inform my choices while designing new products. These models identify distinct states that a user passes through while completing a task. Let me use the finite state model of a typical leisure traveler to illustrate various products and services that are geared towards specific states.

A traveler goes through three main states for any given trip. After discovering and deciding where to travel, she finds the best deals and books transportation, accommodation and activities. She often shares her opinions, feelings, photos, videos, reviews, etc. for that trip with her friends and fellow travelers. She uses multiple services and interacts with many friends and strangers through each state during the trip. In most cases, transaction only occurs when a user transitions from “Discover” to “Travel” state as shown in the state diagram below.

Discover: Travelers often discover and decide their destination through one of the following channels:

  1. Social Discovery: Many travelers end up discovering new destinations through social networks such as facebook or Google+ and from day to day conversations with their friends. Once they’ve decided their destination, they proactively end up asking for advice from credible friends. While most users rely on in-person conversations or using the social networks directly, some have started using services such as Gogobot, Trippy, Chalo.io, etc. to discover destinations and activities. As per the latest report on Social Media in Travel 2011 by PhoCusWright, referrals from Facebook to hotel websites are converting at a higher rate than referrals from traveler review websites. Facebook’s higher conversion rate provides some provocative circumstantial evidence that travelers may be engaging in travel planning and shopping activites on the social network.
  2. Q&A: From TripAdvisor to Quora, travelers rely upon one of tens of generic and travel- specific Q&A services to get destination-specific questions answered. While there are many travel-specific Q&A sites and mobile apps such as Bootsnall, gtrot, WAYN, igougo, etc., TripAdvisor is the unanimous leader for finding answers to almost any travel- related questions.
  3. Destination Reviews: While many sites such as TripAdvisor, igougo, Tripsay, Lonely Planet, Fodor’s, etc. offer destination reviews, travelers have started relying more on hotel reviews offered by online travel agencies. Such reviews play an important role in a traveler’s purchase decision.
  4. Travel books, magazines, blogs and TV shows: Some travelers get inspired to travel to certain destinations based on an article they may read in a travel magazine or a travel show they may have watched on TV. Many travelers still buy travel books from leading publishers such as Lonely Planet, Fodor’s etc. to learn more about new destinations.
  5. Search engines and filters: Both Google and Bing offer travel-specific vertical search. Additionally price-sensitive travelers often use vertical search engines, filters and aggregation services offered by companies such as Kayak, Hipmunk, SideStep, etc.

Travel: The second state entails booking the trip and managing itinerary.

  1. Deals and booking: Travelers use a combination of leading travel search engines and online travel agencies to find the best deals and book them. Customers often pick one travel agency over another or purchase directly from the airline, hotel or rental car company on the basis of two main criteria — price and convenience.
  2. Trip management services: While most leading travel agencies offer basic itinerary management and on-trip alerts, lately customers have started adopting services such as TripIt and Trippy that aggregate multiple itineraries and offer comprehensive yet simple ways to manage a trip.

Discuss: The final state often loops back to the “discover” state through social discovery.

  1. Reviews and ratings: Travelers often express their opinions about a destination and rate hotels they’ve stayed in and services that they’ve used after a trip. While most travelers express their opinions on social networks, many take the time to leave a review on the online travel agency’s portal or one of the travel advice websites.
  2. Share photos, videos and notes: Many travelers share their notes, photos and videos from trips with their family and friends via email, social networks, blogs, etc.
  3. Plan a new trip through social discovery: Seeds for travelers’ next trip are often planted during or right after their current trip. Based on their interactions with friends and fellow travelers, they often discover new destinations for their next trip. Typically, a traveler connects and interacts with one or more of the following:
  • Friends who have been to the destination they’re traveling to
  • Friends who stay at the destination they’re traveling to
  • Fellow travelers to the same destination
  • Friends who want to visit the destination they are traveling to

The travel industry has products and services that specialize in each state as well as some large incumbents such as Expedia, Travelocity and Priceline which offer services for each state. Finite state models have helped me stay focused on the customer’s core needs while building new products and I continue to use them. What is the finite state model of your customer’s behavior?

-Kintan


Originally published at kintya.com on April 23, 2013.