Behavioral Psychology Has More to Do with Customer Experience Than You Think

    Many organizations probably don’t give behavioral psychology a lot of consideration when developing a customer satisfaction strategy. But you might be surprised to know it can play a significant role in establishing loyalty, increasing referrals, and boosting sales. What’s more, behavioral psychology tools are quite inexpensive to implement, making them attractive to cost-conscious executives. 

    Just how important is behavioral psychology for improving the customer experience? In reviewing the vast body of research on how people make decisions, McKinsey concluded that “by focusing on these principles and implementing them masterfully, companies can design and manage service encounters to maximize customer satisfaction.” 

    Thus, to assist companies in deploying such techniques, McKinsey’s Behavioral Insight Lab developed a framework of behavioral drivers called CHOICES – Context, Habit, Other People, Incentives Congruence, Emotions, and Salience. The acronym provides managers with an easy tool to remember the motivators that compel customers towards certain behaviors.

    Organizations looking to leverage behavioral psychology can use McKinsey’s framework to create a more positive customer experience. Consider the following five specific behavioral techniques:

    Increase Personalization

    People respond more positively when they receive a personalized experience. For businesses, adding a personal touch to customer service can be as simple as reaching out to customers by name to gather feedback or as seemingly complex as dipping into a CRM system to automatically trigger a personalized SMS coupon based on a customer’s recent purchases. Fortunately, the integration capabilities of today’s communications technologies make the latter example of automation much simpler, saving you time and money while still making customers feel valued and understood.

    End on a High Note

    Research shows that customers place more weight on the end of an experience, making a positive ending more important. Simple strategies such as express check-outs or proactive fraud detection notifications leave customers with a more positive feeling about your products and services, making them more likely to come back and to refer your business to others.

    Intersperse the Positive Aspects

    The frequency of positive and negative experiences also plays a big role in customers’ overall perceptions. The best approach is to cluster potential negative incidents together while interspersing positive experiences consistently throughout the customer lifecycle. The higher frequency of positive experiences yields an overall happy customer. An analysis of your typical customer journey can help you rework the process, ensuring you develop a roadmap that is sure to leave customers with a positive overall impression of your organization.

    Give the Customer Control

    People like to have a sense of control, whether it be real or imagined. Allowing customers to select service times and keeping them proactively updated on the status of orders or deliveries makes them feel empowered. Offering choices on how customers can interact with your service teams is another way to give control to the customer. This feeling of control is a strong behavioral stimulus that can result in positive attitudes regarding your company, contributing to increased brand loyalty.

    Offer Something New

    By nature, people are drawn to things that are new and interesting. Adding upgraded features and services (even if they are small) is a great way to drum up new business and upsell existing customers. But it’s important to find balance in this approach so that customers don’t feel you’re constantly trying to pitch them. Offering certain enhancements for free as innovative improvements and taking care to know which a la carte features will be of value to individual customers are two smart tactics that can help create an experience that makes customers feel loved instead of ‘sold’. What’s more, using customer feedback to drive or fine tune such upgrades will help to ensure your efforts are positively received - and your sales and adoption rates continue to rise.

    Creating incremental improvements at individual touchpoints is a start, but McKinsey emphasizes that redesigning the entire customer journey “has the potential to yield sustained improvements in customer satisfaction.” Since most of these approaches require minimal capital investment, there’s little risk – and lots of upside - for businesses who choose to tap into them.

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