Katie Dove is an applied behavioral scientist and managing director of Irrational Labs, a  product design and behavior change lab. She and her team help companies like Airbnb, Microsoft, and Uber answer the question, Why do our customers behave like they do? and then help them design creative solutions that work. We caught up with Katie for an in-person chat at INDUSTRY; in our conversation, we discussed:

Human Value in Products.

Katie unpacked the notion of amplifying user value – human value, to be more precise – stressing the importance of understanding user behavior and needs, rather than just focusing on economic value.

“When I talk about human value,” Katie explains, “I’m actually talking about what’s created for the user in the moment of using a product or an experience online. And so I contrast this a little bit with economic value. When you do that in product,” she adds, “people will come back more, they’ll be more loyal, and they’ll increase their engagement.”

The Power of Feeling Known.

It’s crucial for users to feel recognized and known by product builders. In fact, during her talk, Katie pointed to research that says it’s more important that the consumer feels known than it is for the consumer to know us. As product leaders, we can boost our users’ sense of feeling known through personalized experiences and interactions that build trust, loyalty, and engagement.

Companies like Duolingo are successful because “one of the very first things they do is get to know you,” Katies adds. They go from knowing nothing about their user to knowing a lot by guiding them  through their onboarding quiz, which asks about the user’s preferences and increases their expectation that things will be tailored to their needs.”

Balancing Personalization and Privacy.

How do we balance our desire to personalize offerings with our users’ desire for privacy? One way, Katie explains, is by being transparent about data usage and actually asking users questions to ensure they feel comfortable with how their data is being used.

“By asking questions, you’re doing two things,” Katie says. “You’re giving people the opportunity to have some agency in the process, and you’re making it explicit what you’re collecting and why.”

Katie also points to Irrational Labs’ Three B model of behavior change. It involves

1. Conducting a Behavioral audit, which maps out all the steps required to get to that key behavior
2. Exploring the user’s psychological Barriers to performing that behavior, and
3. Increasing the Benefits of taking the desired action.

Be sure to catch the entire episode to learn more from Katie Dove about using behavioral science and psychology to help your team drive user value.

Save the date! ITX’s Product + Design Conference returns to Rochester, June 25-26. Find out more!

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Sean Murray [00:00:09] Hey, everyone. I’m Sean Murray.

Sean Flaherty [00:00:10] And I’m Sean Flaherty.

Sean Murray [00:00:12] Welcome back to Product Momentum. A community of product people and a marketplace of ideas where leaders and learners come together to shape our way ahead.

Sean Flaherty [00:00:20] Our production team is the best in the industry, and we are dedicated to producing high quality content from thought leaders across the product development space.

Sean Murray [00:00:28] Check us out on your favorite listening platform or if you prefer the video experience. You can find all our latest episodes on the Product Momentum YouTube channel.

Sean Flaherty [00:00:37] Let’s get after it. Sean, This is an awesome episode of my favorite subjects Psychology.

Sean Murray [00:00:52] Your favorite subject? Something that somewhat terrifies me. Psychology or behavior? Science. I was like, Am I going to be down on a couch? Just you don’t have a clipboard. Like, I was worried. I was worried. But.

Sean Flaherty [00:01:01] But, you know. Katie Dove,  She made it easy. She’s such a smart, intelligent speaker. Like, has such a grasp of the domain. Her speech was amazing today. The industry and we were able to unpack a lot of her ideas. This is a great episode.

Sean Murray [00:01:14] We threw some wild stuff at her and she was right on the ball.

Sean Flaherty [00:01:18] She’s on it. It was awesome. Let’s get after this.

Sean Murray [00:01:20] Let’s do it. Katie Dove is managing director at Irrational Labs, where she helps companies like Google, Walmart, Microsoft and LinkedIn solve for key outcomes like engagement or retention based on user’s actual behavior rather than their stated intentions. She is an expert at creating transformative digital product experiences at scale using behaviorally informed approaches. Previously, Katie was a leader in Deloitte’s Digital Human Experience Practice, a group focused on shifting traditional approaches to designs that elevate human connection and relationships. Katie is here at INDUSTRY helping product people understand behavioral science and how to amplify human value in products. Thanks for being with us today.

Katie Dove [00:01:59] Thanks for having me.

Sean Murray [00:02:01] Your talk was awesome. Amplifying value, human value and products. I’m going to ask you to like help unpack that a bit for our listeners. So what’s human value in products and what does amplifying that look like?

Katie Dove [00:02:13] Yeah. So maybe I’ll just take a step back. I’m part of Irrational Labs and we use behavioral science and psychology to help users in to help organizations drive user value by understanding how they can change behavior, whether it’s increasing engagement, reducing churn, these types of things. And so when I’m talking about human value, I’m actually talking about what’s created for the user in the moment of using a product or an experience online. And so I contrast this a little bit with economic value. So as one example, imagine you need a date for a wedding and you don’t want to go alone. And so you text your friend, you’re like, do you know anyone I should take? And they say, Bob. Bob is or may be the right answer. He may be a great fit. That is the economic value, but human value is everything beyond that, it’s unpacking the work your friend did to actually find the perfect fit for you to make sure that they were available and free. And you do that in product and people will come back more, they’ll be more loyal. They will increase their engagement.

Sean Flaherty [00:03:18] Awesome. One of the things for your talk I thought was profound was this hyper-focus on getting the user of the products to have a sense of feeling known, like they’re known, like they’re recognized, like they’re a person. And, you know, we know in human interactions how important that is. Tell us about how to do this in the context of a software product, because now we don’t really think about software products as building relationships, but they do.

Katie Dove [00:03:43] Yeah, that’s true. So maybe I’ll just give you an example of some of my favorites. So Duolingo is a product out there that’s really changing the way that people learn languages. And one of the very first things they do is get to know you. So you’re going from an empty state. So basically knowing nothing about the user to knowing a lot by they’re going to their onboarding quiz. And that onboarding quiz does two things. One, they’re asking you about your preferences. How do you want to use the app? How much time do you want to dedicate to language learning every day, which is getting you to understand the value of the product. But it’s also increasing my expectation that things will be tailored to my needs. And they really are building this mental model of how I can get more out of the experience. So that’s one example. And you see this a lot with companies like Noom where they’re also doing these kind of onboarding quizzes and getting you involved and invested in the personalized experience on the backend.

Sean Flaherty [00:04:32] And also, as you said, you saw a statistic out there, some research around how it’s about two times more important to that the consumer feels known than than it is that they know you. Yeah, that is profound. It’s profound way to think about it.

Katie Dove [00:04:46] Yeah. And so that’s really interesting. So there’s this work from Julianna Schroeder. She’s a researcher at Berkeley and she studies how people are able to form successful relationships. And basically what she showed is exactly this. Like we have a relationship now. So since I know you, you know me, I care a lot more about how you know me than about me knowing you. And what’s interesting about this is they they carried out their research actually on dating apps. And people underestimate this. Right. The how important it is to to express that you want to get to know the other person. People always talk about how much they want other people to know them. And this is a big misstep in terms of driving relationship value. You actually want to to get to know the other person or at least state that you will get to know them.

Sean Flaherty [00:05:28] And demonstrate it. Yeah, just say it, but actually do it over time. Yeah. I think this hyper-focus on behavior too is like it’s a pet project of mine. Like I’ve always said, like when you build software products, especially like every micro experience matters, like every micro experience is a moves, whether people realize that are not up and down what I call the relationship ladder, you’re moving towards a stronger relationship or you’re moving away from it. It’s an opportunity that we should treat like an honor, you know, love that.

Sean Murray [00:05:56] You see those behaviors that help you move up that relationship ladder, right? Those are the ones you want to double down on, right?

Katie Dove [00:06:02] Yeah.

Sean Flaherty [00:06:03] You can overdo it. You talk you talked about the Target example. Tell tell the audience about the Target example.

Katie Dove [00:06:08] Yeah. So but one of the things you can do is unpack the effort and of course the target example is interesting and it’s actually kind of a stretch for product. It’s more about advertising and really giving people personalized offers based on your your past shop. Behaviors with an organization, in this case Target. What Target did back in 2022 ways inadvertently out pregnant customers by setting them highly personalized offers for baby products. The problem was these offers went to women who were either unaware themselves that they were pregnant or hadn’t yet shared the news with friends or family. But what Target was trying to do was give you more of what you wanted and needed based on those past behavioral cues today. Exactly. And so even though it may have had this is just a callback to human value versus economic value, even though it had this great economic value, it was actually a good fit and good match for your needs. What the consumer just wasn’t bought in on the how. And so it came across as really creepy because it was unexplained because they didn’t get that you bought in on how they were actually going about this process of personalization.

Sean Flaherty [00:07:08] The miss, as I read it from your talk, is about not really understanding the holistic psychology of the user. Right? Right. And every, you know, every attempt to use data to over predict overindex on prediction, you got to be you just got to be careful with that. You really think it through.

Katie Dove [00:07:24] Yeah. And so Irrational Labs, when we work with clients that the Googles the Intuits of the world we have this three B model of behavior change and what the three B model says is okay if you want to drive a particular behavior, let’s say in this case engagement with an offer, you want to first go through a behavioral audit, a diagnostic process where you say, okay, what are all of the steps in getting to that key behavior? If you want them to engage with the app, you want them to sign in with the app. What are all the things that have to happen? One, that the app has to be top of mind. They need to get a cue, some sort of trigger. And so we map out all of those steps that need to be taken and layer on the psychology. And so that’s where the second and third Bs come in. What are the psychological barriers that get in the way? In this case, the consumer ultimately wasn’t bought in. This was a little bit of a shock because they had no clue where this recommendation was coming from. And they they themselves may have had some level of information aversion, kind of doubting the what wasn’t the course of what’s going on. And then you want to increase the benefits for someone to take that action, which is that third B.

Sean Murray [00:08:28] Now, how do you how do you strike that balance between like personalization and privacy concerns? How do you know you know, are there ways to know, like maybe we’re going too far?

Katie Dove [00:08:38] Yeah, it’s a good question. I think by my solve for this is ask more questions when you’re not sure. By asking questions, you’re doing two things right. You’re giving people the opportunity to have some agency in the process. They get the ability to help, but they are also making it explicit what you’re collecting and why. So asking questions is a great way to get to that point. Another way is like making it very transparent on how these things will be used. So there’s this concept of operational transparency. Again, kind of going back to this concept of maximizing the effort you’re taking on behalf of the user, one way to allow them or to enable them to appreciate how much effort is being taken is by telling them how you’ll use it. So it has a two prong effect in terms of like maximizing how valuable the experience is, but also making sure they’re explicitly aware of how you’re going to use that data.

Sean Murray [00:09:27] Okay.

Sean Flaherty [00:09:28] And so let’s unpack that concept of operational transparency in terms of reducing effort, Sean said earlier.

Katie Dove [00:09:35] In terms of reducing effort.

Sean Flaherty [00:09:37] Yeah, like or not reducing effort, but demonstrating the effort that you put into it, as you had mentioned that too or not, and packing the effort like showing the.

Katie Dove [00:09:46] Consumer. Good question. So imagine you locked yourself out of your house, right? You call a locksmith, they come over to your house. Two minutes later, he’s through the door. He says that’ll be $200 versus they they’re sweating profusely. They’re there for hours. And after they’re fully done in, you’re back in the house. They’re like, man, okay, $200. Which one do you feel better about? You feel better about effort, which is in fact, like you’re paying for incompetence. But the dissonance is like we pay for effort. We value when people are working hard on our behalf. So it’s not just about the optimal thing you give people, but it’s making clear all of the effort that went into delivering that experience.

Sean Flaherty [00:10:23] Yeah, I think there’s a couple of components there. You know, one is you’re showing the customer, you’re clearly demonstrated to the customer that you care about them. Like we did this work because we care about you. That’s right. And the second part is you’re kind of educating the customer a little bit, too, if you if you’re doing it. I think if you’re doing it right. So this operational transparency concept plays on the human, an intrinsic need for competence and for self esteem, right? So like if you’re if you can teach them a little something along the way while you’re showing them how much work you’re putting in, I think it’s like a two fold has a two fold impact, right?

Katie Dove [00:10:54] Does I know you’re a fan of self-determination. Yeah, I think that’s have this twofold effect. So basically this first one around competence. Yeah. And feeling like you’ve contributed to something [inaudible] is a famed behavioral economist and you did an experiment where like you were, you had three different research groups. One, who they would take this test and they would get they bring the test, the front, the person would collect it. And you would get paid for taking the test. Now, as a control, I had another one where they came by the test up. I read the examiner, read all of the answers, then paid them for for their work and then shredded the test. And then this last condition when you brought the test up and and they immediately said it. They didn’t even look at it. Which one do you think persisted through this test the longest? Exactly. People want to feel like they’re making progress, that they’re building some sort of competency. And so, yeah, I think.

Sean Flaherty [00:11:45] That they’re wprl matters.

Katie Dove [00:11:46] About it and that their work matters.

Sean Flaherty [00:11:47] Knowledge matters, their work.

Katie Dove [00:11:49] Matters. And so yeah, and so kind of to this point, it’s not just about the effort that the product is taking on the user’s behalf, but the it can actually be really powerful to get the user to take effort on that.

Sean Flaherty [00:12:00] Yeah, make an investment.

Katie Dove [00:12:02] The Ikea effect is that it’s like we value things more when we contribute to the process.

Sean Flaherty [00:12:06] Yeah, that’s, you know, it’s your point about asking some questions on the way you build this relationship because you’ve asked a question. Now if you’re doing something with the answer and you’re demonstrating that you’re using that answer, that’s that’s sort of the Ikea effect. You’re doing the work with me. You’re creating these little experience rungs in the ladder, right?

Katie Dove [00:12:24] Yeah. You’re contributing. Yeah.

Sean Flaherty [00:12:26] Nir Eyal talked about this. And in his book Hooked he read, I’m sure you read all his work You he was on our podcast a couple of years ago We.

Katie Dove [00:12:33] Let the the pop psych fun books are really fun. They they they’re like a little teaser. And if you dig beneath the covers and really understand the mechanics of how these things work and appreciate the psychology of how people make decisions, you can drive a lot more value for your users.

Sean Murray [00:12:46] What are some tools that, like people could start using right now to start collecting some of these like behavior data from their from their users like And I’m also wondering, is there some benefit to being like very explicit about like, hey, we’re we’re your we are going to collect data about you for x right or is that is it are there kind of like more subtle ways that still have value?

Katie Dove [00:13:07] Yeah, it’s a good question. So the first thing I would say is everybody should be doing some sort of behavioral diagnostic work. You should understand actually not only all the steps that are taken by your user, but the decisions that they have to make along the way, especially if you’re working in health and finance. Often the patient or the user of fintech tools, they’re actually not the only stakeholder that needs to be involved in certain decisions. And so I think that’s the first thing that if you are really trying to empathize with your user and appreciate the work that they need to do, that’s that’s step one. And then behavioral science is about validating and really behavioral design is the translation of behavioral science into applied design. And so a lot of what you want to be doing is taking these cues for how we make decisions and kind of this predictably irrational kind of way. And in actually testing and validating those those things are still true in in product. And so just because something works in a controlled environment in an academic setting doesn’t necessarily mean it’ll translate. You can build a pretty powerful hunch about what will work in any given context. But ultimately you want to get into this routine of testing and validating.

Sean Murray [00:14:10] Okay, cool. We talked about the Target example. Are there other like clear cut examples of like somebody who tried to do this in product that it really backfired?

Katie Dove [00:14:19] Right? Yeah, it’s a good question. So there the only thing you don’t want to do in personalization is be blatantly wrong. And there are lots of ways to avoid that. But there are also leaders that we think of every day from a personalization perspective, like I would think of Amazon as a leader. And yeah, it’s if you buy a chef’s knife, what’s the next thing you get? Recommend another chef’s knife. How is that possible? How many of these do I need in my kitchen? And yet there are these kind of things that they could deduce in terms of use cases. And this is why we don’t want to actually seed everything to AI for making a decision. There is some level of hypothesis-based personalization that is important here. And I think the other most common example of something that just doesn’t work is when it’s too effortful on behalf of the user. So if I think about personal budgeting apps, if I think about nutrition tracking apps, these things are effortful. You go through the process, but you create a lot of very personalized rules that ultimately are very difficult to remember. From a working memory perspective, we can hold 3 to 5 things in our memory at any given time, and you’re asking them to remember specifically what they want to spend on utilities, on like on those are larger categories. But some of these get down to like your entertainment spend each given month. And so how do you how do you think about like making it simple and easy for the user to remember so that they can actually do these things? And so I think actually budgeting apps and and nutrition apps, unfortunately, the reason we don’t stick with them, we set up the Mint account once our appointments and set up the Mint account once and never go back is because it’s too complex. It’s too effortful.

Sean Flaherty [00:15:49] Yeah. And you know, I did some work with Dictionary.com years ago. We were trying to figure out how much information can we gather to personalize. There is a you know, it’s annoying when you’re asking too many questions. You’ll lose people along the way. And I loved your concept of kind of like dripping it maybe and tweaking it along the way. Like ask a question, use that, use the answer so people get the benefit and then ask another question a little later on, like build the relationship over time by asking questions, using it. And I loved your concept of callbacks.

Katie Dove [00:16:16] Yeah.

Sean Flaherty [00:16:17] Talk. Talk about that a little bit.

Katie Dove [00:16:18] Yeah. So a callback is. Just basically a reference to something someone’s already said to you. Knowledge about you and callbacks are really powerful because they say to the recipient that I have a mental model for the types of things that you care about. And so you can create callbacks in product by acknowledging things they’ve done before on the platform. If you think about Nike or and their their fitness app or if you think about Classpass, the first thing they recommend to you is actually the class you just took. And why is that? Because past behavior predicts future behavior, but it’s also a callback to something you’ve already said you care about.

Sean Flaherty [00:16:52] Yeah. To me, it’s like you’re demonstrating that you’re listening. Yeah. So you’re concerned, you’re listening, you’re paying attention, and you’re adding that value back. Yeah. Under the relationship that’s.

Katie Dove [00:17:00] In the real magic comes when you’ve built that level of trust. And you say, I do recognize you. And then you can get them to start to add a little bit out of their comfort zone by kind of giving these recommendations that are similar to things they’ve told you they cared about and that you’ve acknowledged in the application. But now they’re more willing to try.

Sean Murray [00:17:20] Yeah, I think that applies. I mean, even outside of your users, that’s just the way you should operate in life. When you say.

Sean Flaherty [00:17:27] Like, I don’t think it’s different, like good.

Sean Murray [00:17:28] Connection before commerce or something, the.

Sean Flaherty [00:17:29] Connections before connection, before content. Like if you’re gonna step to a meeting, I always tell that to my people a connection before consent. Like don’t jump right in the work. Like talk a little bit. Get to know each other, Make sure you know how their day is going before you get into the work. Because relationships are how we produce creativity.

Sean Murray [00:17:46] And I think you did you did that by showing us your Spotify playlist. And this started at the start of your career.

Katie Dove [00:17:52] What do you think about it? Again, the restaurant example is just a really nice one because you never sit down in a restaurant and they point to the most expensive thing on the menu and you’re like, Yes, I’ll buy that. They have to get they have to get to know you and do some corporate things like actually saying, actually, this isn’t that good today. I’d actually recommend this other thing. These things build trust, asking people about their preferences. It builds this perception of responsiveness to needs.

Sean Flaherty [00:18:14] Before this, we were talking about the Ritz Carlton example to it. That’s another perfect example. Like that’s a hotel that spends a lot of energy understanding that the customer is what they care about and they teach their staff, meaning they take the next step, they go one step further. And I think I don’t think software is any different. Like, I think we have this opportunity and like I said earlier, like each experience we get to produce for our customers, our users in the world. Like it’s an honor to have that time from them. So like, let’s treat it that way. Yeah. Like let’s figure out how to make this experience valuable. Love that. That’s right. That’s right.

Sean Murray [00:18:47] Yeah. You spoke a lot about trust. And, you know, trust is like our first rung in our relationship ladder, right? So we work from trust to loyalty to advocacy. And I think a lot of what you’re talking about is how are we actually creating that momentum upward, getting to advocacy so that I’m helping, you know, as a as a user, I’m invested in actually like the success of the product I want it to do well. I want to tell other people about.

Sean Flaherty [00:19:09] I think that’s something a lot of product leaders miss is that it’s reciprocal. Like if you want those relationships, you have to invest in it, you know, goes both ways, all the way up the ladder for sure.

Katie Dove [00:19:18] For sure. And I think I imagine this has been a theme of today, too, is like, walk it. And it’s not just like I want you to engage more with my product. Why would you actually engage with my product? And can you walk in like walk in their shoes, dog through the product and go through that process?

Sean Flaherty [00:19:32] Yeah. Tell us about idiosyncratic fit. You introduced that distinction in your talk, and I loved it.

Katie Dove [00:19:38] Yeah. So I don’t know if they still do this, but they used to put toys in cereal boxes.

Sean Flaherty [00:19:43] Yeah, of course. So I guess they’ll have some McDonald’s too. And the Happy Meals.

Katie Dove [00:19:46] Sometimes we as human beings hate that because we feel like we’re paying for the additional thing, not the thing we want. And that is basically the concept of idiosyncratic fit when we feel like there’s a unique alignment between the product and our individual needs and preferences, then that offer is much more attractive. I love that when it includes all the things we want and none of the things we don’t want, like the Tony, the Tiger Bowl or like the spoons. Back in the day when there was like Bug’s Life, they used to put spoons. We had all of the spoons. And so some people will like that, but some people will outright reject that offer because they feel like they’re paying for things that they don’t want. We see this in product too, When apps try it and make you feel like you’re getting a lot of value by showing you all the different things that are included. And sometimes that makes people feel like they’re paying for things they don’t need. And so really understanding your customer’s needs and if you want to include those things, there’s there are opportunities. Like I think about this with Adobe. Adobe has like 25 different packages or 25 different feature enhancements in their Photoshop shoot. If you’re coming for Photoshop, do you want all the other things? I don’t know. But you could throw in these as bonuses or as additional to the thing that they’re paying for so they don’t feel like they’re losing out on that value.

Sean Flaherty [00:20:58] Yeah, and again, it always boils down to knowing your customer, like really knowing your customer well and understanding the psychology of the user. So I love that. Was it been awesome. What are you reading these days?

Katie Dove [00:21:09] What am I reading these days? Great question. I’m actually reading a lot of fiction, so nothing immediately applicable to all of you, but just read the book, Subtract, which is really interesting. On. Have you raised a child? Yeah. Okay. I was gonna say that was the last functional book I read, which is about we. We systematically neglect what we can take away from an experience to actually drive appreciation and value in those experiences. So that’s that’s a really great book.

Sean Flaherty [00:21:35] Ockham’s Razor. Beautiful book. Really enjoyed it.

Sean Murray [00:21:38] How do you define innovation? So something we ask all of our podcast.

Katie Dove [00:21:42] How do I define innovation? It’s. That’s a good question. I’ve never been asked this question. I said, No, no, no, it’s coming. Why? Good question. I think innovation happens when you unlock latent demand. You find a better way to do something that where people have been circumventing a traditional process or a design or a product to get to the answer they need, if you can unlock that latent division. I think that’s true innovation.

Sean Flaherty [00:22:10] That’s a unique answer. I love it. Yes. Well, thank you for joining us today, Katy. This is a great conversation I can’t wait to share with the audience.

Katie Dove [00:22:17] Thank you so much for having me.