Hedonistic adaptation and customer loyalty
- Entrepreneurial Spirit
- Customer Centricity
- Candor
- Respect
- Winning Teams
These are Multitude’s core values, and it is upon these values that we are trying to shape the future of Multitude on. In the first article, The golden rule of fintech — it does not exist, if it is not scalable, I’ve explored the concept of scalability and entrepreneurial spirit. In this blog, I’m looking at the psychology of ‘hedonistic adaptation’ and customer loyalty.
“Our past experiences shape our future expectations.”
There is a notion called “the hedonistic adaptation”. One can go as far as arguing that customer loyalty is not part of our human nature. To briefly explain it, let’s take an example of a new car. As you are driving your old car, which you are used to, you might notice features that don’t work the way you would like or expect it to. One day, you buy a new car and for a period, you are amazed by all the nice features, comfortable solutions and advanced gadgets. Yet, after a while, the hedonistic adaptation kicks in. You start taking all those positive and new features for granted and again, you find yourself unsatisfied. Your new car becomes a mere baseline product.
Everyone has experienced it. Unless you consciously lower your standard (by for example using only the public transportation for a month), there is a chance, that you won’t ever appreciate all the nice features of your new car, and you’re left wanting the next new thing to bring a hit of dopamine.
Hedonistic adaptation refers to the idea that all people have a happiness “set point” they tend to return to following major life events or purchases. It is no surprise; this works the same way with the user interfaces and digital products. The digital ecosystem and marketplace are extremely competitive and new products can disrupt the market at any moment. There is always something new to catch up with for all the players out there if they don’t want to be worse than the new baseline.
Taking all this into account, it would have to be naïve to think that our customers will be loyal and forgiving for no reason. FinTech’s need to be their own harshest critics and work on the basis that we are at risk of losing customers by not providing, “the latest” and the “best in the market” quality.
We at Multitude understand that:
“Loyalty (same as respect) is always earned, never given and it can change at any moment”
as the market is a complex, living organism, that changes monthly or even weekly.
That’s why we are never satisfied with the current status-quo and we are constantly challenging, monitoring and improving existing solutions. But how do we in the IT hub do this at Multitude?
We try to be pragmatic and data-driven. Behavioral science says that:
“Customers stay for the good product and leave for the bad customer service.”
Thanks to this result of multiple research studies, we understand that customer experience does not end with the solution itself. That’s why we invest significant portion of our effort into the CX solutions and every employee (programmer, designer, product owner, …) has the customer experience in his mind while creating their part of the solution.
When aspiring to build the customer loyalty, we are building our effort on three major pillars:
- Programmers and solution designers focus on removing the negative aspects of the existing solutions — giving the customers at minimum the best solution out there, which they expect,
- Customer service improves its services and creates positive experiences — preventing disloyalty,
- CX experts are constantly monitoring the market to be up-to-date with the best solutions out there and are creating the proposals for the improvement of our own features and products — creating such solutions that attract customers and build loyalty.
This is our current Multitude mindset. Of course, it evolves with the changing needs of the market and our customers, but currently, it really helps us find a sustainable way through the ever-changing digital environment we are in.
