If you are unaware of what is ‘Nudge’, well then plainly speaking Nudge is a concept that is found in behavioral science, which is most often used to influence decision making in our everyday lives.
In other words “Nudge Theory” states that behavioral economics in business context outlines that we human beings are never as logical as we think and the decisions we take are influenced by several factors that control our lives.
Moreover, Nudge Theory also shows how indirect suggestions and positive reinforcements can help us to take the correct decisions and influence our actions, which are in many instances more successful than direct instructions, or enforcement.
We see examples of real-time implementation of Nudge Theory every day, such as replacing sweets with fruit-and-nut based snacks at supermarket checkouts to encourage improvement in public health.
While Nudge is becoming extensively used in the public especially for conducting non-profit activities with grand success, this is still a new concept in B2B and B2C industries.
However it has been observed that using Nudge as a concept in all aspects of Customer Experience (CX) may not only help to create opportunities which can influence customer behaviors, but it can also influence their future purchase habits for the growth of businesses.
However, we need to remain careful over here that while using Nudge is absolutely suited to the increasingly digital way we work, it is also extremely easy to misuse Nudging to change or ‘twist’ customer behaviors.
Richard Thaler the Nobel Prize winner calls this ‘Sludge’ which illustrates how powerful Nudge Theory is in reality and therefore we should always ensure that we use Nudge positively and carefully, rather than for actions that can create ‘dark and seamier’ outcomes.
Now, talking about implementing Nudge in Customer Experience or CX Nudge is meant to ensure the success of CX programs in businesses in two ways:
• Boost the willingness of the consumers to respond to feedback requests that in turn offers insights needed for businesses to adapt or change, without manipulating or influencing the purchase or other behaviors of the consumers.
• Nudging your internal teams to do something real with the insights that we generate from the customer feedbacks rather than simply measuring them using easy to use CRM tool. Since CX is a factor that only improves because of some positive changes in the organization.
Well, although this above-stated concept is nice to talk about on an abstract and theoretical level, but what does Nudge Theory truly look like when it is put to practice for a B2C business or when it is applied to a very different kind of customer journey that is found in B2B environments?
Use Nudge as a trigger for action
To understand the importance of Nudging, let us first remember why we collect feedback from the customers in the first place.
Most of us in business say that we collect customer feedbacks because we want to spot actions and thereafter bring changes for achieving better results in business. However, while most organizations collect customer feedbacks with good intentions, according to a Forrester report the stark reality is that only even less than 33 percent of organizations that collect feedbacks from their customers use it for driving changes in their company, and only 15 percent deliver improved results from their customer feedback programs.
Now, Nudge is one solution that we can use across both groups (customers and establishments) to improve businesses to drive changes and boost revenue for their companies.
As the name “Nudge” suggest, using Nudge Theory in businesses is not about making sweeping changes to an entire program. Rather Nudge can be used for looking at the way in which customer feedback programs are designed, both in terms of the questions that businesses ask their customers and the insights that they deliver to their executives and thereafter make subtle alterations that are more likely to foster and create better actions.
How to apply Nudge internally and externally?
The most convenient way to assess what all changes that are needed to be implemented is to follow the core principals of Nudge Theory, which was outlined in 2014 by the Behavioral Insight Team:
“Do they look for feedback from their customers and then deliver executive insight in an Attractive, Easy, Social, and in a Timely manner?”
From the perspective of the customer, the main driver for providing their feedback to the companies is “what in it is there for me?”
Customers increasingly need to know why they are providing feedbacks and what actions the company will take and the results they will deliver out of it. Therefore Nudges that suggest customers might want to share their feedback and views have to be both attractive and easy, to catch the attention of the customers through personalizing the customer feedback emails send with the help of easy to use CRM software with clear indications as to how their views will be used to improve upon their future customer experiences.
It is critical over here that businesses must ask for the feedback from the perspective of the customers and NOT from the perspective of the organization sending it.
An ideal way for doing this is to change the wording of the questions in the feedback forms from “Did our store employees welcome you at the door?” to “Did you feel welcomed as our customer while entering our store?”, as this provides a subtle Nudge to response based on the individual experience not on how well the employees in the shop were trained to do their job.
The social aspect of Nudge is what that is particularly important is CX. Consumers are strongly influenced by what other consumers are doing or have already done.
This is because consumers have an intrinsic desire not to be the one left out, and so if brands tell them that an offer is ending soon, or that they are one of the few customers in the list those that have not signed for a new trial or service, consumers are more likely to take action, compared to if they were not.
Now, if a feedback program asks for feedbacks by suggesting the respondent can ‘add’ his or her voice to the 2,500 people who have already shared their views to improve the service of an organization, it is much more likely to make other consumers respond to the feedback than simply requesting “tell us how was the service of our floor staffs today?”
It is even better if businesses can illustrate the things that they have already improved or changed based on customer feedback, and additionally ask their consumers to make their voice heard if they do not agree with other’s opinions.
The three internal rules while using Nudge for improving CX
There are three broad internal rules which businesses can apply more commonly to drive success in CX for their growth:
• Do not offer too many options
Too many options and choices lead to confusion. Therefore it is important that employees in businesses must cherry-pick three “best” options that are most likely to create actions.
• Appeal to social norms
It is critical that businesses must appeal to different personalities and understand what drives groups or individuals to take actions. For example, by demonstrating that others in their situations have done “X” to achieve “Y”, it is much more likely to prompt similar actions.
•Share expert opinions
Using authoritative advice and suggestions from third-party sources are much more likely to make things happen than what comes from using internal rhetoric or hearsays.
Hence, once you use these rules you can easily see how Nudge Theory can boost CX success by delivering better insights to executive teams in businesses and prompt customer-facing actions.
This is because one of the most critical aspects of Nudge is to make insights to be easy and timely, which extends the “choice” aspect one step further.
Nudges that are simple and highlights areas for immediate action can be marked in red and areas that are working well marked in green, which helps executives to focus on the actions that matter the most for their businesses.
To conclude, it must be remembered that for Nudges to work effectively, they must be relevant not only to the customer, but also to the context of individual company’s culture, and the desired outcome of their CX program as a whole.
Therefore, there is practically no use of implementing Nudges that will steer consumers towards committing a behavior that is incapable of driving bottom line success in businesses.
Hence, while using the Nudge Theory and Nudges it is critical that your approach should be as honest as possible, as it has been stated in the onset, that a Nudge is a form of manipulation that if misused can promote “bad behavior” as an outcome, and so CX professionals must adhere to more ethical principles and provide freedom of choice and transparency both to the customers and the employees in their organization for mutual benefit, which is the only way to improve CX using Nudge Theory for rapid business growth.