Liraz Margalit: " Data scientists are prone to fall into what we call the “black box” assumption: thinking that human behavior can be understood simply by observing external data."

Technology — like all tools — can be used for both positive and negative purposes. Liraz Margalit sees both sides of the coin. While excited by the potential of machine learning in the customer experience, she also cautions against the increasing sway technology has on every aspect of our lives.

Liraz's columns draw heavily on her background in social psychology and behavioral economics. She also uses this background to advise clients including Walmart, Nike, IBM and more understand why customers make the choices they do. At a time when more businesses compete in the realm of customer experience, Liraz is here to remind them that "an experience doesn't occur in the physical world, it occurs in the mental world." 

'A Portal Into the Inner Human Experience'

What excites you about your field today?

The thing the most excites me about the field of digital psychology is the fact that more and more brands and startups are discovering the importance of understanding the human mind and not only in ecommerce. The realization that different types of industries from fintech to crypto and even cybersecurity leverage psychology from the early stage of product development. To truly understand customer behavior, organizations need a deep understanding of the way people think and behave.

Data scientists are prone to fall into what we call the “black box” assumption: thinking that human behavior can be understood simply by observing external data. Humans are not machines. We are complicated, intelligent and emotion-driven, and companies who rely too heavily on cold numbers in a bid to understand their consumers are cheating themselves by forgetting this.

Machine learning offers unlimited potential for reaching customers in new and exciting ways. Using machine learning methods, we can zoom in to identify patterns that are invisible to the naked human eye. But one thing machine learning can’t offer us, at least not yet, is a portal into the inner human experience. 

If people could use only one word to describe you, what word would you want them to use?

Passionate

What’s one lesson that we collectively can’t seem to learn?

These days, most of us are trapped in the web and unaware of the fact that we mostly are not in control of our choices and decisions. Not only are our choices of what to eat, what to drink, which restaurant to visit or which vacation to book done unconsciously, but so too are our critical life choices and decisions, such as our mate, profession, pension plan, financial investment tracks, and so on. All of these are silently governed by the Tech Giants whose influence and control over individuals’ minds keep increasing as users become ever-more dependent. The meaning of shifting our lives into the digital world is that every link we click on, every online form we fill out, every scroll or swipe is documented and analyzed. Digital companies constantly collect these digital footprints, create profile of every user and use it to target the users’ motivations, emotions and preferences. They send each user a flood of personalized messages so as to engineer the user’s every action, feeling and thought without requiring direct interaction.

What work-related trend will you be watching in the year(s) ahead?

Today, there’s a desire to make marketing more human again. While technologies such as AI and data-driven marketing continue to grow, the overarching focus will be on people, not technology. We’re seeing a massive shift in beliefs about what marketing actually is. It’s no longer about trying to convince people to buy from or work with your company. Instead, the priority has moved towards providing fantastic customer experiences that will keep people coming back for more. When you focus on building a positive business culture and providing great service, the marketing almost takes care of itself. Seventy-three percent of people say that customer experience is an important factor in their buying decisions, but currently only 49% of U.S. consumers say that today’s companies provide a good experience.

What’s one work-related trend that surprised you? (could be from any point in your career)

The after COVID effect: Shoppers against all odds are going back to one of their favorite pastimes: in-store shopping.

With more people getting vaccinated and dropping their face masks, retailers from Walmart to Macy’s are seeing an eager return to their stores after more than a year of their customers migrating online during the pandemic. The overall adoption of digital transformation to all fields is too early.

What’s the best piece of advice you ever received?

You miss 100% of the shots you don't take.

If you could make one wish for your industry for 2022, what would it be?

Stop using NPS score. Since its introduction 16 years ago, the Net Promoter Score, or NPS, has become a foundational business metric. Based on a single question— On a scale of 0 to 10, how likely are you to recommend our company? — it’s a simple way to get a quick read on consumer sentiment, and it’s been widely embraced in the marketplace. Yet when I help businesses I realized NPS provides mostly broad strokes, akin to a compass pointing companies in the right direction. It doesn’t provide a more-detailed topographical map to navigate a rough or uncertain landscape.

If you could make one wish for your industry for 2022, what would it be?

To leverage technology to make people closer together instead of set apart from each other.