The Concept of Behavioral Debt

I’m fortunate to be a part of several circles here in Silicon Valley that get together frequently to discuss big ideas and engage in all kinds of technology related philosophical questions. I started sharing a concept I had been thinking about in this group and was encouraged to flesh it out further. So I would like to introduce it to all of you for thoughts and feedback. Consider this one of those posts you need to have your thinking cap on. I’m calling this concept “Behavioral Debt” and it explains why a company’s customers don’t act or do the things they want them to.

The simplest way to understand this is with the popular saying, “You can’t teach an old dog new tricks.” I am attempting to put more understanding around this idea as it relates to the consumer tech landscape. I seem to run into issues around behavioral debt regularly in my research on the consumer market. Companies want to know why their customers aren’t buying new products or services they offer while their old ones seem to be all their customers are interested in. In most cases, what we observe is simply entrenched behavior that is very difficult to evolve. Once a behavior is established, debt is built up around it. The longer that behavior remains entrenched, the larger the pile of behavioral debt. The larger the pile of behavioral debt, the more difficult it is for that customer to climb out from under it.

Let’s use a tangible example in Facebook. Facebook would like to move into a more transactions-based model for the buying and selling of goods on their platform. Here we may likely see the ugly reality of behavioral debt rear its ugly head. Consumers have built up years of behavioral debt just doing a few main things on Facebook. Consumers are likely content in this reality and, when they want to buy something, they go to Amazon or some other established online merchant. Facebook wants to offer them the chance to do this on Facebook so they don’t have to leave and go spend time and money somewhere else. But you can’t teach an old dog new tricks and I have a feeling convincing consumers to do anything more than they do today will prove quite tricky for Facebook due to the many hours/years spent building up behavioral debt around how they use Facebook.

Similarly, Intel, Microsoft, and the PC makers would all like to sell more of the 2-in-1 PC concepts. These devices are not the cheapest machines on the market but they offer better margins. The problem is, 2-in-1 PCs sell at a fraction of the volume of notebooks. What Intel and Microsoft have not yet learned is there is a massive amount of behavioral debt built up around the PC form factor. People understand it, they are comfortable with it, and they have established workflows on it. Many of you have heard me say those who grew up with a PC have a bias for it. This bias is explained by behavioral debt.

This is why we observe consumers in emerging markets or the Gen Z kids of today do things with their smartphones and tablets many of us can’t believe. We see them do things and think there is no way they can do those things without a PC. The reason this “you can’t do real work on a tablet” phrase keeps incorrectly showing up is because those who use it have a ton of behavioral debt around PC-based workflows. Those who do not have PC behavioral debt are free from those biases and are able to break what seems like new ground but is entirely natural to them.

This should also be recognized by startups trying to do something similar but better than what a popular service already does. We see startup after startup offering a feature, like a messaging app or a commerce store that proposes to be better than what hundreds of millions of people already use. More often than not, these fail because, when behavioral debt is built up, the person rarely wants better — they simply want familiar.

Getting customers to break free from behavioral debt is very hard. It also seems it is very rare given the case studies I’m finding and working through. This one point, circling back to Facebook, is what makes something like Snapchat so interesting. Snapchat is on pace with Facebook in the number of videos played. The main difference being the vast majority of videos played on Facebook are not clicked on where on Snapchat they are. Facebook wants/needs videos to be successful but their users just want to get on Facebook, post a picture or share something, see some posts from others and move on. Getting video engagement has been a challenge for Facebook because of their users behavioral debt. But with Snapchat, video was the assumed experience from the beginning. Starting fresh means stating without behavioral debt. This is why, in my opinion, Facebook must continue down the road of acquiring a family of assets which encompass the needed consumer behavior. Buy Snapchat for video, Twitter for real time news and global social communication, and whatever else springs up.

I’m working on some principles that seem to be a way to shake up consumer experience and jolt them from their debt but I’ll share more on that at another time. For now, I’d love to hear what you think.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

12 thoughts on “The Concept of Behavioral Debt”

  1. Most people are creatures of habit because trying out new things
    is cognitively burdensome (System 2) and requires getting out of your comfort
    zone. In addition, most consumers have been fooled in the past by overhyped
    products and hidden charges. In that sense, consumer apathy is a protective
    mechanism that is a highly efficient way to save time, reduce complexity and
    avoid mistakes.

    As for your Facebook example, my immediate worry would be that
    Facebook ends up sharing or leaking purchasing data in my timeline (e.g. your
    friends like this). Anybody who has ever placed an Amazon order for a birthday
    gift on a shared computer will know what I mean. My life is much simpler if I
    can keep various activities in neatly separated silos, so I don’t need to worry
    about unforeseen consequences.

  2. Agree completely. This is what we are seeing in Fintech where behavioral debt is huge and those working on banks are still not able to recognize the threat while start-ups on this space have not really been able to disrupt common practices.

  3. So is behavioral debt the reciprocal of behavioral investment?
    Why an intrinsically negative word (debt)? Is it simply because it impedes sales?

    1. Yes, other ways it has been phrased is emotional sunk costs. What I need to reconcile is essentially what you and others are pointing out. It is easier to go to one app that does one or a few things well than try to do them all in one app. However, then we look at China where a mobile first class of people are comfortable doing in WeChat what it takes many apps to do here in the US. Part of this may be cultural or related to their length of time using technology so their maturity.

  4. Ben, I never appreciated this until two things happened – one, I watched my wife who hates using technology. Mind you she’s a white collar professional, spends her life on a laptop/phone/powerpoint, but would rather not listen to music (or listen to the same thing over and over) rather than twiddle around with Apple Music (we have AM connected to Sonos in the house – it’s “easy” but her barrier is high), and two – becoming a parent of two small kids. I love to explore, but have zero tolerance for new stuff once I’ve figured something out (there’s always something new to figure out).

    From a company perspective, they are all we are considering (do I buy from Facebook?), but from the “user perspective” there’s a lot going on (the whole spectrum of buying choices, including not to buy). I think companies need to have multiple “experiences” — finely tuned, so that they can onboard customers at exactly the opportunity the customer is “vulnerable” to onboarding. Young people (Gen Z in your example), they’re an open field, no pre-existing habits. It’s easy to attach behavior to their path through life. When the habits exist, you have to find unmet needs and build habits around them.

    Here’s an example I tried to get a bank to do. Think ApplePay, and changing customer behavior from card to digital. For a lot of us we’re like, “no brainer”. However, many aren’t compelled to change. To explore. The card is fine, they have other things to worry about with limited cognitive surplus to invest.

    However, you and I know ApplePay is easy.

    What if, the bank trained their call center and implemented a program. When customers had their cards lost/stolen/expired… just like today, they’d send a new one. BUT, at the same time, they’d configure ApplePay for the customer (lots of details I’m skipping here). This means, that… for about a week, while the card is in the mail, the customer ONLY HAS ApplePay. With some small incentive (double points, cash back, etc), the bank can get the behavior they want while demonstrating one of the most convenient features (instant delivery of new card to digital device). The customer would have zero friction installing ApplePay (my experience is that the experience varies bank to bank, but here they’d focus on it “just happening”). They’d be incentized to use it in the window when they only have the digital card. And, the bank wins because it’s more secure and maybe more sticky than a traditional credit card, or because they now have an opportunity to become top of wallet if they weren’t before.

    You can’t deliver a service like this if you’re not really highly focused on the experience. You’d say, “oh, we can do that today”… or you’d discard the importance of the human behavior elements of what’s going on there.

    The more debt, the more focused the experience needs to be so that it pushes through the friction that results from the debt. (hope this all makes sense)

  5. Nilay Patel, the EiC of The Verge, tangentially touched upon this in several columns earlier this year, suggesting that the rise of analog gadgets and digital devices that perform an extremely limited number of tasks is a response to increasingly complicated technology being peddled by companies who are failing to understand that whiz bang tech for whiz bang’s sake leads to nothing but failure.

    Here’s his first piece on the subject:

    And here’s the second, in which he details his experience of giving his mom a Chromebook.

    His thesis, ultimately, is that consumers are *not* seeking new experiences, nor are they willing to accrue “behavior debt”, to use your parlance, but are instead retreating to past familiar experiences where the mental burden of understand WTF is going on is lifted.

  6. I tend to agree. Once you find and are using something that works well, i.e., above your pain or annoyance threshold, you’re likely to stick with it … unless you get a free trial for something else and find it is significantly “better” than what you were doing before.

    In your Facebook transaction example, I’d think that those who are new to Facebook and don’t have Facebook behavioral debt, or are new to commerce and don’t have Amazon/established merchant behavioral debt, will be more likely to use Facebook transactions.

    It is possible that those who were using WeChat for messaging weren’t yet doing transactions elsewhere and thus willing to adopt the WeChat store, or that the WeChat store was significantly better than the other merchants apps. For example, WeChat may have a much better reputation/brand or better security than any of those other merchants for its users. (Note Facebook does not have a better reputation for security/transactions or for retail breadth/depth than Amazon.)

    Along the same lines, the Apple Music free trial was intended to get iPhone users to try streaming and adopt it, in addition to or instead of downloading music. But to also attempt to get Spotify or Pandora paying users to switch, Apple had to offer something more (Beats radio?, exclusives?, family plan?).

  7. I’m slightly uncomfortable with your use of the word “debt”, somehow what you’re describing doesn’t sound like what I think of as debt, i.e. owing something to somebody which they haven’t yet “paid” for. Perhaps behavioural inertia?

    As I read your piece I heard echoes of “jobs to be done” theory. To use your example, if a person’s current PC or current tablet is doing the jobs they were purchased for even if that requires workarounds or compromises, why switch to a 2-in-1 just because the manufacturer has a higher profit margin? The customer is right to thumb their nose at a new product if they’re not convinced it does more than the job they currently are already doing with their old equipment. Its the responsibility of the manufacturer to make the compelling argument that a new product will unlock serious advantages for the consumer and apparently manufacturers are less good at it than they should be. Early iPad outdoor advertising showed a person relaxing in a chair using an iPad in a way that laptops just aren’t that good. We even had a new term, lean back computing to differentiate tablet use over lean forward computing. That concept didn’t face behavioural inertia because people saw the way their lives were changed. Of course once customers owned a tablet, it continued to fulfill that early JTBD and didn’t need upgrading.

    We know there is a standard adoption curve. The first iPhone had compelling advantages to early adopters but more than that, smartphones (iPhone and Android) offered compelling advantages to most people within a short period of time. There was no behavioural debt form the mass of people to stick to their old feature phones. As a result smartphone sales and usage skyrocketed. The advantages of the toaster-refrigerator are less compelling.

    1. ‘I’m slightly uncomfortable with your use of the word “debt”‘

      I respectfully disagree. We are often “indebted” to another. And the concept of making deposits to an emotional bank account with customers is often used in sales and marketing.

      But perhaps this is semantics. Regardless of the term used, I think the concept expressed is outstanding.

  8. Fantastic article, Ben. I love your description of the concept of Behavioral Debt. I may even use your article as the starting point for an article of my own. Well done.

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