🧠 How Psychology Saved Apple

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Hi there - Jen here :)

In 1997, Apple was 90 days from bankruptcy.

But how Steve Jobs saved the company proved he was a master of customer psychology.

Today you’ll learn:

• How psychology - applied consciously or not - saved Apple

• The relationship between choice and conversion

• A simple visual exercise that can help you optimize your customers’ decision process to increase conversion rates

👉 But before we get started, if you’re interested in learning what makes your buyers tick, I recommend learning more about Customer Journey Mapping. Below you can find two new free resources that can help:

• Explosive Growth: 10 Ways Journey Maps Can Boost Your Business.

• Swipe Files & Analysis of 20 Customer Journey Maps: Use this free download to gather ideas and inspiration for the design of your customer journey map (a very important part of the process).

Jobs returned as the head of Apple in 1997, 12 years after getting kicked out by his own board of directors and handpicked CEO John Scully.

He'd kept himself busy, leading companies like Pixar and NeXT, but he KNEW he had to get back to Apple.

And when he finally did, the first thing on his agenda was to meet the product team to review what Apple was selling.

(Fun fact, while Jobs was in exile from Apple he worked on softening his management style and sharpening his business skills by working with executive coaches like John Mattone and Bill Campbell.)

The Apple Steve Jobs came back to was a mess - they were making too many products for too many people.

Stretched thin and sacrificing strategy to satisfy retailers’ demands, they were producing more than a dozen different versions of the Macintosh computer.

For no other reason than every electronics store in town wanting to say they carried “exclusive” Mac desktop.

Apple was also selling random and unprofitable products, like its digital camera (created by Kodak but fronted by Apple) called the QuickTake:

And the Newton - one of the first digital assistants, but also one of Apple’s biggest commercial failures:

That many products left customers totally confused… so they just didn’t buy anything.

After weeks of sitting through meeting after meeting about product updates, production timelines, and budgets, Jobs finally put his head in his hands and shouted,

"Stop! This is crazy."

He walked to a whiteboard and drew up a 2x2 square with the words “desktop” and “portable” on the left and “consumer” and “pro” on the top.

Jobs put one product in each box and killed the rest.

Steve Jobs got Apple to focus by simplifying their approach.

He knew that a great customer experience meant making it easy for people to make decisions - not hammering them with 1000 different product options until they threw up their hands and walked away.

How did simplification work out for Apple?

Well, in September of 1997, when Steve Jobs ran this exercise Apple had lost over a billion dollars.

But only a year after this simplification project, they were turning a profit of $309M.

The Psychological Dangers of Choice Overload

When there were too many products and product variations, Apple’s customers were experiencing analysis paralysis.

It’s that feeling of anxiety when you have so much information that any action feels like the wrong one, so you don’t do anything at all.

It’s down to something called the Choice Overload Effect (also called Overchoice).

It says that too many options can be a bad thing - they can confuse, overwhelm, and make it difficult to make a "good" decision.

And once people do make their choice, they can feel disappointed in it because they're still not sure it's the "right" one.

How Simplicity Encourages Sales

In practice, simplification and reduction of choice is more nuanced than just saying “less choice = more sales.”

A more refined view of choice in marketing is this:

“Lots of options can attract customers to browse your store and build trust in your brand, but narrowing down choices into easy to compare options makes people much more likely to buy.”

Not quite as catchy.

But in reality, any purchase process can easily become overcomplicated because most marketing or operations teams don’t go through the process much themselves - if at all.

Or, some unethical companies purposefully overcomplicate purchase decisions in the hope that you’ll agree to something you don’t really need to just get the whole thing over with.

Car dealers are notorious for this type of purchase process.

They ask you a million questions, purposefully drawing out the process, and ask you consider dozens of unfamiliar options like complicated financing options, extended warranties, services packages, GAP insurance, and wheel, tire, and paint protection.

Sure, you might consider a few of these things but by the time you’re in hour two of this process, you’re mentally exhasted and ready to say yes to anything just to get out the door.

🧠 How to Make Customer Decisions Easier

If you want to make your purchase process simpler (and increase your sales and conversion rates), mapping it out can quickly make it clear where things need to get streamlined.

For example, here’s a quick visualization showing how customers who are watching their diet might make a decision about what to eat at a fast food restaurant:

If you think your decision process might be bloated or overcomplicated, I’d recommend doing an exercise like this one to visualize the options customers have to consider - or just reply to this email and we can talk about how Choice Hacking can help you do a similar Choice Audit project.

Read, Watch, Listen

• 5 Surprising Ways Customer Journey Maps Help Create Better Marketing [Read]

• Questioning the Status Quo, One Leader's Perspective - an interview with Rose Marcario, President and CEO of Patagonia [Watch]

• Check out the latest episode of the top-rated Choice Hacking podcast [Listen]

FYI - I have 1 consulting spot opening up in April and 2 in May.

Reply to this email to book a free exploratory call or scroll down to see a menu of consulting projects.

Until next time,
Jen

Want to use behavioral science, psychology, and AI to grow your business?

👉 When you’re ready, Choice Hacking can help:

• Coaching: Looking for clarity, focus, and confidence in your work? Behavioral Science-powered 1-on-1 Coaching could be a good match for you.

• Courses & Skill Sessions: My popular course “How to Create Magnificent Journey Maps” has been updated to the 3.0 version. I’m only opening it up for enrollment 1x this year, and am capping registration at just 25 people so I can give more individual attention to students.

  • Register your interest for free here - I’m only sending invitations to enroll to people who register interest and am sending them on a first-registered, first-served basis (so far 75 people have expressed interest for these seats).

• Training: We can help your team level up their work with psychology, behavioral science, and AI training.

• Consulting: I’ll work to support your business with projects like:

  • Learn what makes your buyers tick with:

    • Customer Journey Maps

    • Customer Insights Report

  • Getting visits but not enough clients or customers? A Website Audit could be a good match for you.

  • Customers confused, overwhelmed, and not converting as well as you’d like? A Choice Audit can help. Just reply to this email.

  • Can’t seem to get your freemium users to convert to paid? Then a Free to Paid Conversion Audit will help you figure out what’s going on and what to do about.

  • Bespoke Project