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Are behavioral science, customer centricity and customer experience compatible?

Adrian Swinscoe | Jul 6, 2017 210 views 6 Comments

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When companies talk about being customer centric, they often talk about putting their customers at the centre of their decision making and only doing things that are in their best interests.

However, at the same time, many of those companies will also be leveraging a large number of the powerful insights that are coming out of behavioral science, behavioral economics and behavioral design and will be using them to help design and deliver a customer experience that stands out, attracts new customers and helps keep their existing customers for longer.

But, let’s look a bit closer at some of these insights and what it means to be customer centric.

Imagine a company that is keen to leverage some of the latest behavioral design insights, so they send their designers and product managers to attend one of BJ Fogg’s behavioural design courses at Stanford or one of Nir Eyal’s workshops based on his 2014 best-selling book: Hooked, where they will learn how to use behavioral design to create a product or a service that gets their customers ‘hooked’.



Now, surely, that raises some questions……..Is designing something that gets your customers ‘hooked’, customer centric? Does that have your customers best interests at heart?

However you answer these questions, both BJ Fogg and Nir Eyal have expressed caution on how firms and brands use the persuasive power of behavioral design.

And, they are not alone in expressing caution.

The same issues apply to the application of insights from behavioral economics, where many governments, companies and brands are now ‘nudging’ their ‘customers’ to do different things, subtly change their behavior and take different actions.

Richard Thaler one of the co-authors of the 2008 book: Nudge, that first popularised the idea of ‘nudges’ is also cautious about the use and application of these new tools. In a New York Times article in 2015, he suggested 3 principles should guide the use and application of ‘nudges’:

  1. Any nudge should never mislead and should always be transparent.
  2. It should never be hard to opt out of the nudge.
  3. There should always be a good and clear reason for why the nudge will improve the welfare of those being nudged.

These are great principles but, unfortunately, not all companies follow them. Thaler highlights a couple of examples of bad practice in his article and the Dark Patterns website does a good job of gathering a number of transgressions from around the web.

Whilst it may seem like only a small thing to nudge a customer to do something or design something to get them hooked, leveraging these tools will have consequences and their misuse can cause more damage than any additional value that they may create.

As result, companies would do well to not only exercise care and good judgement in how and when these new tools are applied and used but also to decide how much is too much.

This should be done explicitly and through a set of standards, ethics, promises or guidelines that are actively managed and monitored. To not do so risks careless transgressions and unforeseen problems that could seriously undermine customer trust and your overall customer experience.

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6 Responses to Are behavioral science, customer centricity and customer experience compatible?

  1. Thomas Wieberneit July 6, 2017 at 2:56 pm (3 comments) #

    Adrian, one of the best questions that I have heard in a while, and I agree with what you seem to conclude: They can be compatible and it depends on how science is applied. I’d venture to say that most companies that use insights of behavioural science use it to their own benefit and not the customer’s. The problem is in who defines what is good for the customer? Let’s take the ‘nudge’ as an example. If the nudge goes into the direction of making you buy my product then it is not customer centric. If it goes into the direction of the customer getting a clear understanding of his/her own needs and priorities – which then might lead to buying my product then it is.

    The secret lies in the philosophy behind. Science is a tool. Its results can be used one way or another.

    2 ct from Down Under.
    Thomas
    @twieberneit

  2. Dave Fish July 6, 2017 at 5:20 pm (17 comments) #

    Interesting question. An old question that can go back to the days when people were freaked out by the thought of being tricked by a few frames of freshly buttered popcorn sown into a drive-in movie reel. Most of these “new” concepts are based on fairly old stuff such as the work of Kahneman, Tversky, Cialdini, and others. Resurrected and remarketed with younger folks (some of it new and quite good as well). Sure it can be used to make you buy that glass of wine for slightly more or get lured in my the call of “free”. However, there is a ton pro-social stuff that can be done with it as well that is in the best interest of the the customer and society. For what’s it is worth as a “behavioral scientist” in the field of CX, I don’t see behavioral sciences incompatible at all with CX…anymore than marketing is incompatible. Just another set of tools in the toolbox that can be used for good or….not so good. Thanks for the read. Enjoyed it!

  3. Ian Golding July 7, 2017 at 2:38 am (109 comments) #

    Great insight and debate provocation as always Adrian. Personally, I have no problem with the principle of trying to ‘hook’ customers into a relationship, as long as it is one that they can easily ‘unhook’ from it when they choose to do so. Too many organisations are still consciously or subconsciously turning customers into ‘hostages’ – obviously not a customer centric behaviour.

    For me it is all about balance – balancing what the organisation wants with what the customer wants – the better the balance, the more likely it is that both sides of the see saw will have their needs and expectations met.

  4. Thomas Wieberneit July 7, 2017 at 5:51 am (3 comments) #

    Hi Ian, let me challenge ‘balancing what the organization wants with what the customer wants’ – what if one said: In your chosen area of business build/organize around what the customer wants, offering best value to the customer; that is automatically good for the business.

    Of course one now could say that this is back to balancing due to profitability targets 😉 – but the mindset is very different.

  5. Michael Lowenstein July 7, 2017 at 7:19 am (1273 comments) #

    Caution regarding taking any linkage at face value (always a good idea) notwithstanding, there is solid proof of the compatibility of behavioral science, customer/stakeholder centricity and customer experience. For example, in our CX and stakeholder cultural work with clients, we actively use the “peak end rule’ concept of Nobel laureate Daniel Kahneman (he won in 2002 for his work in behavioral economics) to look at the (positive and negative) effect of emotion and memory on the lasting impact on customer experience perception and downstream decision-making.

  6. Andrew Rudin July 7, 2017 at 8:34 am (192 comments) #

    That nudging horse has already left the barn. “Nudging” customers has existed since the time marketers and salespeople started marketing and selling. Probably before. And big data and predictive analytics have skewed even more nudging power to vendors.

    “Any nudge should never mislead and always be transparent.” How would anyone define that, let alone implement it? One quick f’rinstance: should all retailers include fine print on items priced at $X.99 to read: “Note: when considering whether to purchase this, please round item price to the closest integer value.” Consumers don’t know the half of all the marketing devices and illusions that are foisted upon them countless times every day.

    Yet, most vendors must operate with a fundamental assumption: Customers still decide what, when, and how much to buy. And a corollary assumption: customers and potential customers are capable (note: I did not say rational) deciders. (I’m talking about marketing to adults here, and not to children.)

    So when crucial selling tools such as big data and predictive analytics become available, why should vendors willingly discard them? Because they might be misused? The central issue that you bring up – the standards, ethics, promises or guidelines that are actively managed and monitored – is governance. Executives need to be accountable not only for profit, but also for ensuring that their strategies and tactics do not cause harm to customers, employees, vendors, and other stakeholders.

    That’s a pretty relaxed standard. Yet, companies willfully miss it (Wells Fargo, Takata, GM . . . there’s a long list). Sadly, at many companies, marketing/sales governance is largely ignored at the board level. Or, the board is satisfied when it’s given lip service, usually through a fluffy mission or vision statement. That there’s no muscle behind it doesn’t seem to phase people.

    Little wonder. Many are self-righteously focused on “maximizing shareholder value.” I hope that ten years from now, society will look back on that obsession as an anachronism – an artifact of assertions by economists like Milton Friedman that mutated into corporate activities that truly create harm.

    If you have read my previous articles, you’ll know I’m no defender of how professional marketers conceive and use “cutting edge” tools. And I’m not sanguine on the inevitability of benign outcomes when it comes to deploying marketing technology. I chafe at the breathless hype around personalization (I call it surveillance), and lead generation (predatory marketing), etc. But I also don’t advocate that any company should eschew a technology or process because it could be deleterious.

    Each year, I write a column titled “Announcing the Sales Ethics Hall of Shame,” updated with the companies that earned the award that year (see http://customerthink.com/announcing-the-2016-sales-ethics-hall-of-shame/). Year-to-year, I never know which companies will make the cut, but I’m certain that I will always have new candidates.

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