Observer-Expectancy Effect: How Expectations Shape Product Design
Your customers are judging you before they even start using your product
By Tristan Kromer · Quick Answer: The observer-expectancy effect is a cognitive bias where our expectations unconsciously shape how we perceive outcomes — and it directly impacts how customers judge our products. To design better products, we need to align with three interconnected components of customer expectations: Objective (the core job to be done), Time (how quickly results are expected), and Context (situational factors surrounding use). As product managers, customer development interviews alone aren’t enough; we must “be the customer” and deeply understand the full ecosystem influencing their purchasing and usage decisions.
- Observer-Expectancy Effect (This is a guest post by Dan Toma, Senior Innovation & Product Manager at Deutsche Telekom AG and author of the upcoming The Corporate Startup Book. You can find Dan on Twitter, LinkedIn or his blog.) 
How much stress, anger and frustration can one simple malfunction or a minute delay in response cause? We experience expectation related frustration on a daily basis with the objects we interact with, the products that we purchase, and the services we acquire. In order to consistently design better product, services, and experiences for their customers, there is one critical first step any entrepreneur needs to take: understand the customer’s needs better than the customer understands themselves. Often times, we are disappointed by our peers, by particular experiences, by products that fail to deliver the job we hired them to do, or by services which, for one reason or another, don’t match out standards. What do we do then? We stop using them and move on to the next similar one which, hopefully, is at least going to meet our expectations if not exceed them.
Observer-Expectancy Effect
Psychology researchers have proved that our expectations unconsciously influence how we perceive an outcome of any given event, naming this cognitive bias: observer-expectancy effect. In a world full of analogous offerings, going beyond the value of experience can mean the difference between having a successful venture or no venture at all. For the majority of us, expectations are like a black box, but by dissecting them we can stumble upon insights that will help us in building better products that will deliver the value required by the people hiring them.
Matching Expectations
Any expectation is made up of three interconnected components that need to be in-sync with themselves, as well as with the end-user:
Object****ive:
Every expectation has a predefined objective. Usually the objective can be crystalized by the value proposition of any given product or service. Let’s take for example a pen. The object of general expectation when picking up a pen is for it to be able to leave marks on a surface. If the pen fails to deliver this component of the expectations the user will most like opt for another method or tool, which might be another pen, or any other writing tool.
Time:
Looking closely at the temporal component of the expectation of a particular customer will give insight on how time influences the purchasing and using decision he makes. If you expect a particular event to occur in the next 5 minutes, every minute that ticks away beyond that 5-minute threshold is frustrating. This is true for the delays in receiving your order at a restaurant as well as the load times of mobile apps.
Context:
Usually overlooked, the contextual component of the expectation is essential for delivering value, since every activity that we perform is subject to a variety of contextual factors. Let’s imagine for a second, a handyman performing his work in low light conditions. If you are designing and building tools for this individual, understanding the context in which he is operating in (low light) can result in a better designed and built product. For example, a bright colored screwdriver is easier to find than a black one, especially when the only available light source is a head mounted lamp.
Beyond Customer Development
Even though one understands what the customer wants through customer development, building truly remarkable products/services requires a deeper comprehension of the entire ecosystem of variables, which influence the purchasing decision, and usage of a particular solution. So talking with customers is not enough - entrepreneurs need to ‘be the customer’ in the sense of using the product as the customer would, not just deliver a set of features requested by the customer in the interviews. Although the user’s purchasing decision is some times not a logical one and more of an impulse triggered by external factors, designing products that will deliver the value proposition and deliver the expected results will ensure both customer satisfaction as well as retention over time. (This is a guest post by Dan Toma, Senior Innovation & Product Manager at Deutsche Telekom AG and author of the upcoming The Corporate Startup Book. You can find Dan on Twitter, LinkedIn or his blog.)
Frequently Asked Questions
What is the observer-expectancy effect in product design?
The observer-expectancy effect is a cognitive bias where our expectations unconsciously influence how we perceive the outcome of any given event. In product design and customer development, this means customers judge our products not just on objective performance but against their pre-existing expectations — making it critical to understand and align with those expectations.
What are the three components of customer expectations?
Every customer expectation is made up of three interconnected components: Objective (the core value or job the product must deliver), Time (how quickly the customer expects results), and Context (the environmental and situational factors surrounding product use). As product managers, we need to keep all three in sync with the end-user to avoid expectation frustration.
Why is customer development alone not enough to build great products?
While customer development helps us understand what the customer wants, building truly remarkable products requires a deeper comprehension of the entire ecosystem of variables influencing purchasing decisions and usage. We need to go beyond interview responses and actually “be the customer” — using the product as they would — rather than simply delivering a set of requested features.
How does context affect customer expectations for a product?
Context is an often-overlooked component of customer expectations that can make or break product value. For example, a handyman working in low light conditions would find a bright-colored screwdriver far easier to locate than a black one. Understanding these contextual factors during design leads to products that genuinely deliver value in real-world usage scenarios.
What happens when a product fails to meet user expectations?
When a product fails to deliver on any component of user expectations — whether it’s the core objective, timing, or contextual fit — customers simply stop using it and move on to an analogous offering. In a world full of similar products, going beyond just meeting expectations to exceeding them can mean the difference between a successful venture and no venture at all.
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