A cutting edge behavioural approach to achieving your contact centre’s objectives

A cutting edge behavioural approach to achieving your contact centre’s objectives

August 29, 2016

CCMG Conference – Down the rabbit hole 20160829 v2.0 brm

Applying behavioural economics in contact centres

CCMG National Conference 2016

Table of ContentsIntroduction to behavioural economics

Using it to increase sales, cross-sell, product usage, and retention in

contact centres

3

Before continuing with an explanation of behavioural economics, consider the following question: Would one of the tables fit in your dining room better than the other?

Introduction to behavioural economics

4

They are in fact identical tables. The graphic is merely a visual illusionIntroduction to

behavioural economics

Which line is longer?

Source: Genesis Analytics team analysis, 2016 5


They are in fact identical. The graphic is merely a visual illusion: your eyes were deceiving you



Our intuition deceives us in repeatable, predictable, consistent ways and there is nothing we can do about it



8

These cognitive illusions have turned up unexpectedly in many studies; for example, what do you think causes these large differences in rates or organ donation across countries?

Source: Ariely, 2008

Rates of organ donation membership across a sample of European countries(Percentage of the population, 2008)

86%

100%100%100%100%100% 97%

12%17%

28%

4%

Netherlands Belgium FranceAustriaGermanyDenmark United Kingdom

Portugal SwedenPolandHungary

Check the box alongside if you want to join the organ donation program

Check the box alongside if you DO NOT want to join the organ donation program


9

As another example, imagine choosing between these two trips overseas


Option set 1 Option set 2

Free trip to Venice for 5 days, all inclusive

Free trip to Paris for 5 days, all inclusive

Free trip to Venice for 5 days, all inclusive

Free trip to Paris for 5 days, all inclusive

Free trip to Paris for 5 days, all inclusive, except for coffee


10

A real example of this was the subscription service for The Economist magazine


Option set 1 Option set 2

68%

32%

26%

84%

0%


11

Behavioural economics is the science behind why people act “irrationally” and how they can be nudged in a particular direction

Source: Genesis Analytics, 2015

Hindsight bias

Negativity bias

Denomination effect

In-group bias

Verbatim effect

Spacing effect

Recall biases

Picture superiority

Context effect

Self-generation

effectModality effect

Social biases

Fairness

Herd effect

Market norm vs.

Social norm

Representative bias

Bandwagon effect

Decision biases

Hyperbolic discounting

Decoy effect

Bayesian conservatism

Framing

Attribute substitutionConfirmation

bias

Boomerang effect

Belief biases

Rhyme as reason effect

AnchoringAttentional bias

Availability bias

Recency bias

Frequency bias


Behavioural economists know that we know two systems of thinking that cause most of our strange decision-making


Subconscious and automatic

Emotional

Vulnerable to biases and systematic errors

Conscious and deliberate

Slow, infrequent and effortful

Fast, frequent and effortless

Logical, skeptical and reasoned

Calculated and precise

System 1: Reacting

System 2: Reasoning


My team at Genesis Analytics is obsessed with the strange way humans think and make decisions – we use this to assist companies in growing and becoming more profitable

13Source: Genesis Analytics, 2015

Our clients include:

If this interests you:

TED Talk: Dan Ariely – Are We In Control Of Our Own Decisions?

TED Talk: Sheena Iyengar – The Art of Choosing


https://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions?language=en#t-243215



http://www.ted.com/talks/sheena_iyengar_on_the_art_of_choosing?language=en



Table of ContentsIntroduction to behavioural economics

Using it to increase sales, cross-sell, product usage, and retention in

contact centres

15

410 calls

17%

We went on to assist a large retail bank to optimise its client migration campaign. The application of behavioural economic enhanced the script and resulted in a 97% increase in sales and a 550% improvement on the implementation of the strategy


Original Script: Behavioural economics Script:

Mr Smith the reason for my call is to discuss your current product so as to optimise your experience.

Would you like me to continue?

Mr Smith our systems have identified your account as having qualified for an upgrade to better suit your needs

We have already helped upgrade many of our customers and would like to do the same for you now…

Mr Smith most customers with your needs are currently using a Product X for the reasons I just explained to you. Would you like me to upgrade you over the phone right now?

Example of elements:

Framing

Herd effect

Default effect Mr Smith would you like to move to a Product X or a Product Y?

785 calls

Number of successful migrations

Correct migrations

94%

We convinced customers to listen to the full call

We convinced customers to migrate to the correct product

Behavioural economics in call

centres

16

We were able to improve the ability of consultants to upsell clients by up to 26% on key products. These learnings were tested in a contact centre and scaled across channels


The likelihood of selling premium products increased, with a corresponding decrease in cheaper products(Changes in the likelihood of selling certain products between the test and control groups, percentage, 2014)

-7,0%-5,1%

1,6%0,6%

25,8%

4,8%

Product C: ~R300 per month

Product D: ~R200 per month

Product F: ~R50 per month

Product E: ~R100 per month

Product A: ~R700 per month

Product B: ~R450 per month

• A large multimedia company onboarded customers over the phone, activating their services in real time

• During this call the customer would need to choose which product they were activating, ranging in price from around R50 per month to roughly R700 per month

• The consultants had no sales training, but had the opportunity to upsell the customer onto different packages

• We segmented customers into two groups, and created a very short and simple needs analysis for each group

• In this needs analysis we used one or two key phrases which played on the herd effect and the denomination effect

• We created simple cue cards to assist the agents in using the default effect to encourage upsell

Context Nudges used

Customers shifted from purchasing cheaper products to more expensive products, with no change in the total sales


centres

17

Through a very simple initiative in a contact centre, we were able to reduce the number of customers who missed their first few payments by close to 40%


• One of our long-term clients struggled with customers missing their first few payments

• Despite the fact that the customers had gone through considerable effort setting up the product and installing it in their home, around one in five customers missed one of their first few payments

• This has a material impact on the business in terms of lost revenue, but also in terms of the customer experience and NPS scores

• After the payment plan was explained to the customer, they were asked to write it down (self-generation effect, context effect)

• They were then asked to repeat the plan back to the consultant (combats the verbatim effect)

• These two simple steps had a dramatic effect on the customer’s payment behaviour

11.8%

Test

19.0%

17.0%

-38%

2.0%

Control

9.8%

2.0%

Failed to pay pro rata amount Failed to pay first full month

ContextCustomers in the test group were significantly less likely to miss one of their first payments(Proportion of customers who missed their pro rata or first monthly payment, percentage, 2014)

Nudges tested


centres


Our team successfully illustrated the benefits of behavioural economics in short-term insurance sales. Working with both lead-warmers and sales agents, we were able to increase the average sales per agent per day by 25%.

The transfer-to-quote ratio increased by 28%-points

-3%

Test

+25%

Historical Average

TreatmentControl

+28%

+16%

6 Month Average Test

+31%ControlTreatment+16%

Average sales per day increased by 16%-points

• We were retained by a large insurance company to demonstrate how behavioural economics techniques can be used I their contact centre teams to increase the volume of new sales

• The volume of outbound sales is largely driven by the lead warmer’s ability to transfer quotable leads and the sales agent’s ability to convert a quote into a sale

25%Overall

increase in sales

The combined impact of the two sets of results

Default effect:“Should we begin with your car, house or contents?”

Reciprocity:Allow one “discount” from the agent and one from the manager

Mirroring:Repeat customer’s words throughout call

Endowment effect:“Some insurance companies overcharge clients by as much as 20%”

Herd effect:“We value all x million of our clients”Framing:

“Will you be able to make a decision today?”Anchoring:Pitch premium at higher price by loading it at first

Context

Nudges used


centres

19

Behavioural economics was instrumental in scripting and redesigning the processes in an entertainment providers call centre, resulting in an increase in self service channel usage by 146%


• A large home entertainment provider had, over time, incrementally improved their call centre allowing them to achieve high customer satisfaction in this environment

• They quickly became victims of their own success, when over time this led to a large increase in call volumes and hence an increasing drag on the budget

• We were tasked with increasing the ability of the call centre agents to encourage customers to use self service channels such as the website, smartphone app, etc.

• Behavioural economics was used in scripting and process redesign to achieve a 146% increase in self service usage


centres

“Customers like you are solving this query with…”

“Mr Smith, most of our customers are solving this query by…”

146% increase in self-service

usage

Scripting

Process redesign

We worked to break down the learned behaviour of calling the call centre when any problem occurs by redesigning processes


How to think like a behavioural economist when facing challenges in your contact centre

The commitment

Define strategic goals

Understand the decision process

Test, learn, and refine stimulus

Implement initiatives

Modify the choice architecture

Genesis Analytics has strong capabilities in the steps that matter most: designing interventions, and testing them empirically

How we apply behavioural economics

Email: [email protected]

Brendan R. Meehan [email protected]

+27 (0)71 671 9241

Business

A cutting edge behavioural approach to achieving your contact centre’s objectives