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Product Management: Behavioral Product Management

What is Behavioral Product Management?

Behavioral product management applies behavioral science and human psychology to product design.

When planning their products, behavioral product managers take into account that people make irrational decisions. Keeping this in mind, they apply psychological research to build products around those irrationalities. It also uses psychological principles to guide customers to the behaviors that the PMs wish them to take.

How Does Behavioral Product Management Work?

It’s a logical outgrowth of traditional product management. All PMs try to create successful products based on their understanding of what motivates customers: their needs, desires, hopes, fears, and frustrations.

However, behavioral product managers understand that the most popular method of learning this information—through customer feedback—can lead to inaccurate conclusions. This is because humans are irrational beings. We don’t always know our reasons for acting or believing a certain way. The context of a situation can alter our opinions.

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Because they understand the limits of users’ self-reporting, behavioral PMs rely less on what they learn in customer interviews. Instead, they take a more proactive approach, based on what they know about human psychology to guide and even change their users’ behaviors.

Behavioral PMs have a unique insight into their users and how to build products that resonate.

Because this approach leverages both product management skills and behavioral science, behavioral product management can help an organization create more satisfying customer experiences.

Examples of Behavioral Product Management

Psychological pricing

Pricing psychology research has found that when customers choose between two pricing options of a product side-by-side, that product’s overall sales increase. Some customers perceive they are getting a bargain by choosing the lower-priced version. Others understand additional value or prestige from choosing the more expensive option.

Decision automation

Behavioral psychology tells us that people find it frustrating to repeat mundane tasks. Behavioral product managers can use this knowledge to make their products more appealing to users. One typical example is the “Stay logged in” option on many apps. Rather than forcing the user to sign in for each session, the app removes that task and lets the user start using the product immediately.

Simplifying the user’s journey

Human psychology also teaches us people can feel overwhelmed by too much choice. Armed with this knowledge, behavioral PMs give their users fewer options during each stage of the product’s interface. For example, a software app will offer a collapsed toolbar on its home page, with only the most commonly used actions accessible. This has the psychological benefit of making the user’s encounter with the product calm and welcoming, rather than overwhelming.

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