How Call Centers Use Behavioral Economics to Sway Customers

Original source: SimoleonSense.com .

H/T Leadon Young

Introduction (Dixon & Thomas @ Harvard)

Next time you’re on the phone with a call center, listen carefully to what the rep says. Chances are you’ll hear your name several times, hear a tone of empathy, maybe an “I’m sorry.” It would be nice to think the rep really cares — but of course she’s probably just following a script. That can be a bad idea, we’ve found. In our recent HBR article “Stop Trying to Delight Your Customers”, we explored how customer service drives loyalty, including the role of managing the emotional side of customer interactions. Here’s some further insight about that delicate dance.

Excerpts (via Dixon & Thomas @ Harvard)

Recently, we ran a series of experiments across two separate groups of customers to better understand the impact word choice can have on a customer interaction:

• In one experiment, the rep had to authorize a customer banking account before the customer could transfer funds. But the rep explaining “you can’t transfer funds until you go through these steps to authorize the account” scored significantly lower than the rep explaining “let me walk you through these steps to authorize the account.” While the language is subtly different, customers rated the latter as 82% higher quality and 73% lower effort.
• In another experiment, customers were told they had to bring their new bicycles to a certified repair shop. The performance of the rep who simply stated “you’re best off bringing it into a repair shop” was rated significantly lower than that of the rep who noted that they’d “pass the customer’s feedback to the engineering department,” “check the database to see if a simple fix is possible,” and “recommend the customer bring the bicycle to the shop.” The latter scored 67% higher quality and 77% lower customer effort.

Such approaches go well beyond traditional soft skills. Instead, these rely on careful language choice to frame answers in the best possible way. This isn’t simply being empathetic — it’s calculated and anticipatory. We call it experience engineering.
Beyond simple word choice, we’ve seen other experience engineering approaches work well. For instance, LoyaltyOne (also referenced in the article) practices an idea called alternative positioning. This approach is premised on learning some basic information about a customer during the interaction, and then using that information to reframe a not-so-great option as an acceptable option. The company’s customer survey scores have improved 15%+ as a result of this practice.

Alternatives positioning isn’t revolutionary — in fact, sales reps have been framing product features in light of customer benefits since commercial interactions began. But, applying this method to service scenarios is quite innovative and generally defensible.

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