Improving Customer Experience With Behavioural Economics
Technology has improved the speed and efficiency of Customer Experience (CX), but it often overlooks the importance of emotion
Fuelled by new tech and a desire to create stronger brand communications, companies are ignoring the importance of the human touch. Gone are the days where customer centricity is a nice-to-have. Our economy is now heavily dictated by millennials, meaning the power has been placed in the hands of the consumer. As our tech-savvy and socially-connected customers rapidly adopt new behaviours, businesses are struggling to keep up. A single piece of content from a disgruntled customer can go viral in a matter of minutes. And with each share or like, months of carefully strategised marketing swiftly unravel as the company is placed in the crosshairs of the tech it so heavily invested in.
Look at any business and you’ll see the same immutable pattern. Millions and millions of pounds are being funneled into 2 distinct areas, infrastructure and marketing communications. But why is this a problem? The development of digital infrastructure allows us to benefit from real-time data collection, large-scale analytics, artificial intelligence and predictive systems. As all of this new tech is embedded into organisations, there is a clear increase in the efficiency of the business. Simultaneously, data-driven, digital marketing techniques allow us to develop an even more personalised experience for each individual.
Unfortunately, strong capability in these two areas can cause many companies to become complacent, believing they are improving the customer experience because they know more about their customers. However, if brand content and automated systems are the sole focus of the business, what the customer wants and their emotional responses to these efforts are completely overlooked. It is apparent that these areas are having a positive impact but it is also clear they are not delivering on their investments.
Some disruptive companies have seen success as a result of their customer centric approach
Monzo – Built for the modern consumer, Monzo is a mobile bank focused on solving problems, rather than selling financial products. The app provides you with instant spending notifications, handy budget breakdowns and fast & friendly customer service.
Moneybox – Aimed at first time investors, Moneybox aims to disrupt the perception that investing is difficult, expensive and time-consuming. The app allows you to connect your card, save as you spend and invest your spare change in thousands of global companies.
Laundrapp – Laundry for busy people. Customers place an order, Laundrapp collect the clothes and before you know it, clean and ironed clothes are returned.
So what differentiates these businesses from others who are still delivering a sub-optimal customer experience?
– All three of these companies have successfully implemented new tech to empower their customers.
– All three of these companies have successfully created stimulating marketing comms to engage their customers.
– All three of these companies have successfully recognised that there is a third and equally important area in-between. The area that I refer to, (the one that many companies neglect), is the space containing the millions of interactions that the company has with the customer. . . This is the reason that Customer Experience needs to be disrupted. . .
For the millions of emails that are never opened.
For the millions of letters that are never read.
For the millions of website clicks that never reach conversion.
For the millions of full baskets that are never checked out.
For the millions of forms that are never filled out.
For the millions of conversations that leave the customer unsatisfied.
In a strive for customer centricity, we have forgotten what is most important. The customer. So how do we bring back the human touch?
The customer experience encompasses every individual interaction between the customer and the company. Every touchpoint impacts the customer experience. So it is not a case of disregarding tech or brand, but instead building a bridge so that each of the millions of interactions positively impact the customer.
The building blocks for this bridge are formed through behavioural economics (BE). The human science that highlights the irrationality behind consumer behaviour. The application of BE has become widespread within Government, from increasing honesty, to paying taxes and even reducing crime. In a world that is becoming less human and more digital, how has this discipline not yet been embraced by the boardroom?
BE transforms the customer experience by highlighting the engagement touch points, removing the cognitive friction experienced by the customer and designing behaviourally fluent solutions that make each of the millions of interactions between the company and the customer count.
By understanding how small changes can influence a person’s behaviour, behavioural economics can provide a compelling toolkit for understanding what is really going on inside customers’ brains and drive compelling results, often at a very low cost. Every business should be using behavioural economics to make their investments in infrastructure and marketing work harder. Transforming the transactional into a relational customer experience.