Behavioral Economics in the Call Center

Behavioral economics, or BE, can transform how customers make economic and personal choices about an organization’s services. In particular, it challenges the view that people make decisions rationally. One of the hottest topics in business leadership today, it combines economics and psychology to explain how people:

• Choose things by observing others and copying.
• Are driven by habits to act without considering other options.
• Try to ‘do the right thing’ but can’t.
• Are loss-averse and want to keep what they already have, rather than try something new.
• Value something today over tomorrow.
• Change their decisions based on the way information is presented to them.

Behavioral economics has been researched and tested by a number of academics and is most often known as ‘nudge.’ It explains why people sometimes make decisions in a different (often not purely logical) way when influenced by factors such as positioning information, words, actions and attitudes.

‘The key ingredient in making this happen is choice’

The theory that we set out to experiment within reality was that each technique, if deployed correctly, should encourage customers to have a two-way conversation and be more in control of making decisions that are right for them.

We engaged with some of the UK’s leading financial institutions and worked to test five out of the forty plus behavioral economics techniques across eight dynamics – sales, service, complaints, business, consumer, written word, telephone and compliance. Testing over an eight week period, using 70 staff to communicate with 69,997 customers – we dedicated 764 hours of research time to support the test.

What did we find?

The research demonstrates that there is value in deploying behavioral economics – because it gives the frontline additional and different conversational tools to have a more adult to adult interaction. These tools are not widely used (if at all) right now – and because the variables are so huge in terms of number of techniques (over forty) and functional specialism of interaction – it opens up a whole new way to address the challenges facing communities:

• Improving customer experience, re-building trust and relationships with increasingly autonomous customers.
• Driving value from the interaction in terms of sales or changing behaviors.
• Driving self-service to reduce costs of operation.
• Differentiating UK service interactions from cheaper offshored alternatives.

Headline results from the research test groups:

• Sales increased by 20.27%.
• Customer satisfaction – up by 7.14%.
• Resolution improvement – up by 62.5%.
• Sales conversion – up by 11.85%.
• Agent confidence – up by 17.8%.
• Performance against objectives improvement of up to 20% by 62.5% of the pilot team.

The best ways of making it work for you

Make the decision. What’s important to you right now – getting the basics right or going forward with a range of techniques that may differentiate your proposition?

Language audit

Organizations need to examine their corporate and customer language and ask ‘how stuck in a rut is it?’ BE offers great opportunities to freshen language and in the process improve customer experience, re-build trust and drive self-service while engaging frontline people. Consumers are seeking value in these stringent economic times, but does current customer interaction language play to this anxiety and really assist consumer decision making?

Be bold & detox

How well matched is your language across all the channels? When was the last time you compared and cleansed across letter, spoken and internet? Give your frontline people the empowerment to make this happen. BE is not just for verbal communication, rather it works across other channels – internet, email, web-chat, face to face and correspondence. This will help your operation truly differentiate from cheaper, offshored alternatives.

Extended BE toolkit for engagement

Use the 40-plus techniques as a program of empowerment and engagement – it could take two years to truly implement and test them all. The lesson of Imparta’s research is that organizations need to review their customer interactions, needs and behaviors, before the careful planning and deployment of BE. This includes choosing the right techniques for individual interactions and deploying them intensely. Embedding the learning and capability development is crucial for long term success and employee engagement.

Bite sized chunks

Imparta’s research focused on working with people who had a range of experience, knowledge and savvy and while there was a lot of feedback around these techniques being ideal for new starters who had yet to form ‘bad habits’ – it was clear to Imparta that the more established and experienced the frontline person, the easier they found it to adapt and be flexible with the concepts.

Grown up deployment

Creativity and empowerment are key to deployment of advanced development programs associated with BE. This should be instilled at frontline, not cascaded through scripting or briefing or 1 ½ hour ‘hit and run’ training sessions. Empowered employees create engaged customers, as proven by many studies, and sophisticated deployment builds buy-in and involvement.

What are the potential long term implications of BE?

This is not another mass market ‘thou shalt…’ – for BE to work best – front line advisors have to be tuned in and turned on to BE – the empowerment has to exist culturally for it to work best in the long run.

In light of the progress of customer contact, increase in self-serve and need for knowledge workers by telephone or web chat – BE could play an extremely important role in making the customer feel special – as the techniques provide an extended toolkit for having an adult to adult conversation

For those organizations who have the ability to be forward thinking – to embed an extended program of bringing BE to life – this would be a great opportunity to enhance your customer communication and also provide rich material to extend learning and development within the organization.

This blog article is based on one of Imparta’s research papers. Read the full research paper here.