New research within the field of behavioral psychology is offering valuable insights on service interactions and customer experience. The recent McKinsey article, “Putting Behavioral Psychology to Work to Improve the Customer Experience,” explores behavioral psychology to understand customer interactions and the impact of initial onboarding.
According to McKinsey, leading researchers Richard Chase and Sriram Dasu identified three major factors that occur during customer-journey experiences and drive customer perceptions and satisfaction. Applying the principles of behavioral psychology can improve the quality of customer interactions and build a more customer-centric organization. The following principles can be applied to help ensure that companies deliver the greatest experience to their users:
Principle #1: Sequence
Customers tend to disproportionately recall the low points of their customer journeys and not all the individual aspects of it. How a company sequences high points with low points can change the perception of the service received. Unpleasant endings have a strong negative impact. For example, by replacing a low point at the end of a stay with time savings before departure, hotels create a positive bump in their stay experience. In customer onboarding, proposals, contracts and payments are often placed towards the beginning of the process so that after onboarding, customers are left with major milestones completed and a sense of positive reinforcement.
Principle #2: Segments
The frequency of high and low points of interaction also affects how services are perceived. Companies have noticed that when customers encounter all negative experiences during one touchpoint and the company deliberately splits pleasant experience into multiple touchpoints—any encounter where customers and business engage to exchange information, provide service, or handle transactions—it can improve the perception of service. For example, many large trade shows combine all payment and registration requirements up front, ideally before the event, and disperse the distribution of popular events, speakers, and samples throughout the show.
Principle #3: Control
Customers want to feel like they are in control of their journey. The more empowered, engaged, and updated they are in the course of the journey, the less likely they are to assign blame to the company when things go wrong. A home-repair company knew from its consumer-satisfaction surveys that customers cared the most about the time it took for a repair worker to visit the home and fix the problems. However, when the company ran a pilot test, it was surprised to find that customer-satisfaction scores went up when customers were offered options for scheduling, even if each option offered meant the customer would wait longer than the company’s average wait time. Duolingo (the language acquisition e-learning platform) asks their users how long they want to practice each day as part of their onboarding process. This allows users to tailor the program to fit their needs
Companies can take advantage of these principles to improve customer perception of the services they receive by rewiring individual touchpoints for a more customer-centric approach. The following chart by McKinsey & Company offers examples of companies who are already using these principles:
The use of behavioral-psychology principles in customer interactions is growing rapidly. Applying sequence, segments, and control often requires little additional investment and enables companies to improve their service delivery. How could your company incorporate these ideas?
You can read the McKinsey & Company article here.