Behavioral Science and Customer Service (An Interrelational Analysis) Part-1

When it comes to customer service, “perception is reality”, which means that the quality of service encounters profoundly impacts customers’ perceptions of their experience. Behavioral scientists, however, tell us that service people can control how customers perceive services interactions to a certain extent. A profound insight into the human behavior reveals the subtle feelings that customers go through during service encounters and how these can be favorably influenced using certain principles of behavioral science. Customers aren’t always downright conscious or rational about what they do and the reason why they do it, therefore, its service providers’ job to examine their behavior and sort out what works and what doesn’t.

The Predictive Nature Of Behavioral Science Can Improve Service Management:

Behavioral science can be used to understand human behavior and thus look at the factors that drive the intent of customers. Behavioral and cognitive scientists have carefully studied how people interact in social settings, form opinions and remember the experiences. These findings have also benefitted the realm of service management, as service providers are now better aware and able to understand what motivates and engages customers. The economic and psychological dimensions of customer interactions have been studied and scrutinized, mainly because the psychic and behavioral determinants play a great role in influencing customer experience, and these outcomes have been translated into legitimate principles by the researchers. The predictive character of behavioral science can enable companies to understand their attitudes and mindsets, their inclinations and preferences and even the barriers to action. All these insights then help create a tailored experience.

How UAE Lacks the Service Mindset:

Although the UAE is famous for its state-of-the-art shopping malls and grandeur, yet customer service is not its forte. From banking sector to retail and telecom industries, the examples of good customer service are very few and far between. With the recommendation quotient running as low as 11% in the banking sector and an increase in the number of flustered shoppers at the malls there are countless stories of customer service gone wrong. Not much has been done to improve the customer service. “What we found in the region is that there are a lot of companies offering consultancy services for improving customer care in the region but none that executes them,” said Joe Tawfik, the founder and group CEO of Kinetic BPO, while shedding some light on the UAE’s telecom providers’ organizational culture. This is exactly what has been shaping customers’ behavioral intentions and reactions which has been nothing but profound discontent, agitation and lack of advocacy.

The Principles of Behavioral Science: Observing Service Encounters from Customer’s Point of View:

According to a Harvard Business Review research by Richard B. Chase and Sriram Dasu, when it comes to service encounter, perception is more important than reality for the customers. Therefore, it is extremely important to understand how customers interpret or perceive an interaction and then design or manage the service accordingly. The interpretations have been generalized as follows:

1. Sequence Effect:
2. Duration Effect:

Sequence Effect:

Behavioral scientists argue that people do not remember every single moment of a service encounter rather they remember only a few significant moments. Moreover, their overall evaluation of an experience is based on the following points:

• The sequence of pleasurable and painful points
• The finish

For instance, on experimenting, the researchers from Columbia and Cornell University found out that customers who experience lag in pre and post-process phase while at a restaurant (ordering food and paying the bill) carry an overall negative evaluation of the experience in their mind than the in-process delay.

Duration Effect (Also Known as Rationalization Effect):

This effect reveals how people perceive the passage of time. One finding reveals that mentally engaged people do not pay attention to the passage of time. Another one tells that people often overestimate the duration when they pay attention to the passage of time. Third finding is that people perceive an encounter to be longer than it actually is when there is greater number of segments involved. “People’s view of the ?ow of time is often distorted by the context and content of the situation”, Friedman, 1990. So the many the number of segments or events, the greater would be the length of perceived duration.

For example, a study by Villanova University, USA, found the effect of hold time, with music, on customers’ behavioral response. The researchers found that although the music positively influences their emotional assessment of service yet, on the other hand, it also heightens the perceived length of wait duration.

The Relationship between Customers’ Emotions and Behavioral Intentions:

According to a survey by Gallup, emotionally connected customers are likely to spend 46% more than those customers who are satisfied but have no emotional connection. The emotional aspect of customer experience is extremely important in guiding favorable behavior. Customers’ behavior is always based on their perceived memory of an experience which in turn majorly depends on the emotional end of their experience, not to mention that behavioral sciences tell us that customers remember bad experiences more than the good ones. There is no doubt that customer journey mapping can be used to carve out the emotionally distressful elements and curtail their effects, nevertheless, it’s also important to have emotional intelligence in place. In this context, companies can train their employees to be polite, perceptive and responsive because it’s the underlying feelings of frustration or helplessness that create negative emotions.

For example, Ritz-Cartlton employees are trained to observe customers’ likes and dislikes and note them on a “preference pad”. This kind of behavioral profiling helps create a personalized experience for the customers and helps create an emotional bond with them.

Zappos goes to fanatical lengths in making sure that their customers are emotionally satisfied. The company offers free returns no questions asked, where Rob Siefker, the director of customer loyalty at the company, considers this service to be an investment they make in order to provide the best possible service for their customers.

Gamification: Behavioral Science and Customer Engagement:

Although a novel idea, but gamification is a major behavioral motivator and is now being used to engage customers. The fact that it’s hardwired human instinct to feel empowered and accomplished and even challenged, gamifying has led to significant improvement in customer experiences by making customers become more fervent. Gamification in designing customer experience is not about playing actual games, however, there is significant application of game dynamics and psychology in a nongame context. When gamifying customer experience, service providers apply game mechanics to engage the users and create a connected customer experience. Plenty of businesses are using gamifiction today. According to a Gartner Research Report, 50% of the companies are expected to gamify their entire processes by 2015.

Some Examples of Gamification:

There are many examples of companies that have employed gamification to improve customer experience and their loyalty, some of the models are detailed below.

Starbucks:

Starbucks has a loyalty app feature for mobiles called “My Starbucks Rewards” that employs an incentive system which in turn is a great way to incite customers and make them more enthusiastic. Whenever customers use the app to pay, they get a golden star. Likewise, when they get 5 stars they reach a Green Level and are given free refills on coffee or tea purchased that day. The benefits multiply with the number of levels reached.

Foursquare:

Foursquare allows the users who check in to various locations to acquire special deals and discounts. Adding to the element of interest and fun through gamification, the app allows users to win certain badges and achievements like “I am the Mayor of Starbucks!” title etc.

Nike:

Nike+ introduced a gamification system that allowed consumers to track, compare and share exercise results and winning fuel points along the way. The idea has been a great success since the membership base upped to 500k people in 2007 to 11 million in 2103.