As important as statistics and metrics are, numbers rarely tell the whole story. Customers make decisions based on a wide range of factors – many of which are seemingly intangible.
Everything from their mood to the people they find themselves with at the time can all affect how they feel about their experience with a brand.
At our recent event, The Year of Emotion, Sky’s Director of Insight & Decision Science, Simon Hill, delivered a fascinating talk on the subject of cognitive bias. It focused on the fact that human beings are inherently irrational, and the way our brains process and interpret information at a subconscious level greatly reduces our ability to make rational decisions.
In customer service, the ability to understand customers’ cognitive and emotional biases can mean the difference between providing a great service and one that is far wide of the mark.
In this first of two blog posts, we’re going to look at 3 types of bias all CX experts should be aware of:
The Decoy Effect
If you’ve ever found yourself opting for a product that you would previously have deemed an unreasonable purchase, you may have been treated to the decoy effect by the retailer.
Consider this example of a customer looking to buy a mobile phone. Two things are important: the storage capacity, and the price.
The retailer has 2 phones - A and B - but they want to shift more of phone A. Phone A costs £600 and has 128GB of storage. Phone B is £500 and comes with 32GB of storage. Whilst Phone A has a much greater storage capacity, the customer is likely to be swayed by the cheaper model - until Phone C is introduced.
Phone C costs £650 and has 64GB of storage. By adding Phone C into the mix, Phone A becomes the dominating option. Why? By emphasising that the buyer can pay less money for a similar model with more storage (Phone A), Phone C becomes undesirable. Phone B also becomes less attractive, as whilst cheaper in price, the customer is now aware of how much extra storage the other models have, thus making Phone A better value for money and the more rational purchase. Phone C is the decoy product that will increase sales of Phone A.
In CX, being aware of the decoy effect and its impact on client behaviour is powerful. It’s subtle difference above, but enough to completely change the behaviour of the customer. The irrational suddenly becomes rational.
Confirmation Bias
If you’ve ever been delighted with the response to a customer survey that asked whether or not people were happy with the service you provide, we’ve got some bad news: you may have asked the wrong question.
Confirmation bias works on the basis that we only listen to information that confirms our preconceptions and that our perception of the same thing can alter drastically depending on the context in which its perceived. This form of cognitive bias should play an important role when designing customer surveys.
So, what question should you have asked? It may sound counterintuitive, but the question needs to be “what needs to change about our service?”. This frame of reference will change the way your customers think about the answer and will result in a more honest response (even if it isn’t the one you want to hear!).
Hyperbolic Discounting
Now, this may sound like some kind of ailment, but it is actually another form of cognitive bias. It refers to our tendency to want immediate payoff rather than a larger gain later on.
Dr Edward Miller, chief executive of Johns Hopkins Medicine, once illustrated the dangers of this bias with an alarming statistic. In the US, around 600,000 people have coronary bypasses every year but only 10% of them make the necessary changes thereafter to prevent premature death.
That means 90% of people chose the short-term pleasures of unhealthy food and laziness over survival. They’d rather enjoy a cheeseburger than live a longer life. A somewhat frightening statistic, but proof that the ‘eat, drink and be merry’ human trait will exist among your customer base.
None of us are perfect and we don’t always make considered and rational decisions. As humans, we’re emotional and often biased, and your customer service should be built with these traits in mind.
In our next post, we’ll cover three more biases all CX professionals need to know about.
