Using behavioral science to improve the customer experience
Service operations seem a natural setting for the ideas of behavioral science. Every year,
companies have thousands, even millions, of interactions with human beings—also
known as customers. Their perceptions of an interaction, behavioral scientists
tell us, are influenced powerfully by considerations such as its sequence of
painful and pleasurable experiences. Companies care deeply about the quality of
those interactions and invest heavily in effective Web sites and in responsive,
simplified call centers.
Yet the application of behavioral science
to service operations seems spotty at best. Its principles have been
implemented by relatively few companies, such as the telecommunications
business, which found that giving customers some control over their service
interactions by allowing them to schedule field service visits at specific
times could make them more satisfied, even when they had to wait a week or
longer. Many more companies ignore what makes people tick. Banks, for example,
often disturb the customer experience by altering the menus on ATMs or the
interactive-voice-response (IVR) systems in call centers. They fail to
recognize the psychological discomfort customers experience when faced with
unexpected changes.
Likewise, for every restaurant that
surrounds a bill’s arrival with a succession of complementary desserts—thereby
capitalizing on the customer’s preference for service encounters that end
positively—there are a lot of call centers that ignore the importance of a
strong finish. Indeed, many companies actively work against one by placing so
much emphasis on average handling times that they inadvertently encourage
agents to end a call once its main business is complete, leaving customers with
memories of brusque treatment.
It doesn’t have to be this way. Academics
such as Professor Richard Chase at the University of Southern California’s
Marshall School of Business have used research on how people form opinions
about their experiences to design actual services. In a 2001 Harvard
Business Review article,1Chase and his team even laid out
principles for managers to consider when designing any customer interaction.
Get bad experiences over early, so that customers focus on the more positive
subsequent elements of the interaction. Break up pleasure but combine pain for
your customers, so that the pleasant parts of the interaction form a stronger
part of their recollections. Finish strong, as the final elements of the
interaction will stick in the customers’ memory. Give them choice, so they feel
more in control of the interaction. And let them stick to their habits rather
than force them to endure the discomfort and disorientation of unexpected
change.
Here we review the experience of an
insurance company that used those principles to improve its customers’
satisfaction significantly, with no incremental costs or fundamental changes in
people or infrastructure. A systematic approach like this one is needed to
counteract the natural tendency of service operations to focus on the needs of
IT systems and work flows, not to mention the preferences of employees,
managers, and service providers, largely ignoring the way customers perceive
their service interactions. If companies in a broad range of service
industries—including banking, telecommunications, and retailing—applied a
rigorous approach, they would reap significant economic benefits, ranging from
reduced churn to greater cross-selling to additional customer referrals.
Setting
the stage
Executives at a leading North American
health insurer sought to help patients manage their treatment programs for
serious long-term illnesses, such as diabetes or congestive heart failure.
Conditions like these are difficult to manage because treatment is often
protracted and outcomes can depend on the patients’ willingness to make
significant lifestyle changes.
Patients participating in an experimental
health-management program received regular, scheduled calls from a team of
nurses over a period of several months. The calls aimed to deliver additional
support to patients undergoing long-term treatment, by helping them understand
the available options and stick to their treatment regimes, as well as
reinforcing lifestyle changes recommended by their doctors. Improved compliance
helps insurers too, as better outcomes reduce the overall cost of treatment.
In the past, the clinical-treatment
program for each patient had determined the content of such calls, and the
company used what it considered to be a tried-and-true method for managing
them. Team members had received guidelines on the objectives of the calls and
used a checklist to sequence discussions with customers.
Behavioral
science in action
To see if this approach could be improved,
the company divided the nurses into two groups—approximately 20 in a pilot
group and another 20 in a control one—and began applying a behavioral-science
lens to the interactions of the former to test different versions of the call
structure. Postcall surveys measured the customers’ satisfaction with each call
and with the company. Key customer and operational metrics (including sign-up
rates) helped estimate the financial impact. The pilot team used
behavioral-science principles throughout the interactions.
1.
Get bad experiences over with early
The team identified difficult issues—for
example, the forthcoming lapse of certain insurance benefits or the need to
transfer from one facility to another—and moved them to the start of the call.
It also set up a later phase built around constructive coaching from the nurses
on how to deal with the issues raised earlier. In addition, general questions
that were likely to make patients uncomfortable (about current pain levels,
smoking habits, eating patterns, and alcohol consumption, for instance) were
moved from the end of the call to the beginning.
2.
Break up pleasure and combine pain
By combining the most challenging elements
of a call in its first phase, the health-management team could focus on
positive aspects during the rest of it. The team found that patients responded
very positively to coaching by nurses, so there was an effort to ensure that
coaching on multiple topics was an explicit part of every phase of the call. A
nurse might, for example, discuss the next treatment steps, how the patient
could take advantage of all covered benefits, and ways of minimizing
out-of-pocket expenses. There was also an effort to resolve all possible issues
within a call and to transfer it to other groups only as a last resort.
3.
Finish strongly
The conclusion of the health-management
calls was scripted to finish on a positive note by emphasizing the tangible
insurance benefits available to patients and, where medically appropriate, the
likelihood of a successful outcome to the agreed-upon action plan. At the end
of a program lasting several months, with calls taking place every month or so,
patients received a final call from their health-management nurse. This call
ended by celebrating their progress, reviewing the goals they had met, and
summarizing the positive steps they had taken to achieve those goals.
4.
Give customers choice
The company made an effort to give
customers explicit choice on three critical elements: the type of treatment
plan, which facilities to visit and which doctors to see, and the timing of
future calls. In each area, the nurse was guided to tell the customer, “You
have a choice; let me give you some options.” Customers explicitly had the
right to make the ultimate decision, though the outcome may have been limited
or strongly suggested—for example, “Hospital A is closest to your home, but B
is only 15 minutes further away, and it has a specialist unit with a great
track record at treating your condition.”
5.
Let customers stick to their habits
In many situations, it was important for
patients to change their lifestyles—say, by eating different foods, consuming
less alcohol, or exercising. To encourage patients to make these changes while
minimizing the discomfort they generated, nurses introduced them gradually over
a series of calls. Dietary changes might be discussed initially, for instance,
followed by encouragement to begin exercise. The nurses also tried to reframe
the patients’ perceptions of the severity of the changes by comparing them with
more unfavorable alternatives: for example, “instead of eliminating your
favorite foods altogether, why not just try picking low-fat varieties next time
you are in the store.”
The team also worked to ensure that the
calls themselves became a positive habit for the patients. This approach gave
them the option of having the same nurse on follow-up and promoted a consistent
approach for every call, so that they became used to the interactions.
Results
The effect of the changes was significant.
Patients in the test group reported an average satisfaction level seven
percentage points higher than that of patients in the control group—for calls
with the same basic content. These patients’ satisfaction levels with the
company was on average eight percentage points higher than that of the control
group. More important, patients in the test group were on average five
percentage points more likely to say that the calls had motivated them to make
positive changes in their behavior.
Notably, the program didn’t significantly
affect the company’s costs or change key operational metrics, such as the
length of a call or the number of calls a day. Moreover, test group nurses
reported an average level of job satisfaction higher than that of the control
group nurses. Finally, the impact was rapid. Most of the increase in the
satisfaction levels of the test group patients happened within two weeks.
Many other service industries could
benefit from a similar approach. By breaking down frontline transactions and
rebuilding them with behavioral and experiential principles, companies could
systematically achieve rapid, measurable improvements in customer satisfaction.
By John DeVine and Keith Gilson
http://www.mckinsey.com/business-functions/operations/our-insights/using-behavioral-science-to-improve-the-customer-experience?cid=other-eml-cls-mkq-mck-oth-1610
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