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Removing call queuing can improve customer service

The call queuing system is the most basic tool of customer support (welcome to … press 1 for … press 2 for … press 9 to speak to a customer service executive. All our executives are busy. Please hold your call is important to us…). But in one instance employees of a company were using it to avoid talking to customers. They did so because customer service interactions were viewed as costs that were to be minimized. Therefore, if the calls weren’t answered, better would be the company’s profits.

The company we’re talking about is Rackspace that hosts Internet sites for other companies. In 1999 Graham Weston – the founder hired David Bryce to be the head of customer support to change the behaviour of employees dodging its customers. They decided that from now Rackspace would provide ‘Fanatical Support’ to its customers. But providing great service would cost more and if they offered both premium service and cutting edge technological expertise, they would be forced to set their prices high that would reduce their sales.

So Weston and Bryce implemented a small but powerful Behavioural Design nudge. They ripped off the call queuing system. Without it now, there was no safety net. Initially the phone would keep ringing until somebody picked it up. But now it became impossible to dodge the customer. The company also followed it up by launching awards for employees who were fanatical about service. In 2001 Rackspace became the first Internet hosting firm to turn a profit and over the next 6 years, it averaged 58% annual growth.

Rackspace employees didn’t see the need to improve customer service, but neither did Weston and Bryce do anything to make them feel the need. Instead, they chose to simply nudge them into action.

Source: Dan Heath (author of Switch) and Graham Weston’s (founder of Rackspace) interviews in 2007 and 2009

Consumer and Employee behaviour (Bajaj Finance)

Last week we spoke at Bajaj Finance on applying behavioural science to improve sales conversions, new product adoption, product portfolio, choice architecture, pricing strategies, employee behaviour change, productivity, performance management systems, learning and team collaboration.

One of the questions asked during the Q&A was what’s the difference between data science and behavioural science and what’s the role of both in business. We answered the question with the example of Uber. To make sure you can hire an Uber within couple of minutes of booking one and to make sure the cab arrives at the exact location around the time promised, Uber must be applying incredible amount of data science – matching user’s data with driver’s data and of course so much more we don’t understand as behavioural scientists. When Uber would use surge-pricing too, they would apply data science to incentivise drivers to reduce customer’s waiting time. But it didn’t go down well with anyone. So Uber changed its tactic from surge-pricing (1.8x) to upfront-pricing (Rs. 167). With upfront-pricing customers no longer feel its unfair because they are informed about the exact fare at the time of booking prior to the trip, which is a certain fixed amount and that puts customers at ease, even though in peak times Uber indicates that fares are higher due to higher demand. On the other hand, surge-pricing (1.8x) pinched people a lot more. But now with upfront-pricing, Uber is still able to charge a surcharge, but without pinching people as much, thereby improving customer experience. Uber’s upfront-pricing is an example of Behavioural Design.

How a surgeon made breast cancer treatment patient-friendly

If you have been through breast cancer or have accompanied someone’s struggle you may like this story. As all stories on this blog, this story has something to do with behaviour, in this case its about patient behaviour, organizational behaviour change, breast cancer treatment and the change brought about by a surgeon – Laura Esserman.

Let’s first start with the typical process of breast care diagnosis and treatment. The woman first notices a lump on her breast. Anxiously she calls a doctor and meets him/her after a few days by taking an appointment. The doctor confirms that the lump should be examined, so the patient is referred to a radiologist to get a mammogram. Getting the results takes few more agonizing days. The mammogram shows something suspicious, so she is referred to a surgeon who she meets after a few more days spent anxiously. The surgeon verifies that the lump is present, gets a biopsy done at a pathology lab to determine whether the lump contains cancerous cells. Meanwhile the woman is waiting for an answer. If cancer is detected, depending upon the stage, she undergoes treatment, which may involve radiation, chemotherapy and surgery, in whatever order recommended by the surgeon. Different departments of a hospital conduct radiation and chemotherapy typically with different booking procedures and delays. The sequence takes weeks and weeks to unfold, while the woman is wondering, “Am I going to live through this?”

This anxiety-filled process appalled surgeon Laura Esserman. She had a vision of a Breast Care Center where a woman could walk in at the beginning of the day and walk out at the end with an answer. But as an associate professor at University of California at San Francisco (UCSF) at that time she had few resources at her disposal. Plus, radiation oncologists reported to medical oncology, surgeons to School of Medicine, nurses to medical center, psychologists to someone else. So you can imagine the organizational challenge to bring them together. Even if she could start a breast care clinic, she would never be able to hire such talent at such salaries.

Like all big changes, Esserman started small. She set up the Breast Care Center for only four hours one day per week. She would see the patients in the morning, send them off for a break and ask them to come back at 1pm. During that time, she would go to radiology, look through all the images with the radiologist and decide the next steps. In the second year, she expanded to two days per week and soon enough the snowball began. Eventually the Breast Care Center got an entire floor. The number of patients skyrocketed and the Center became a major source of revenue for UCSF. Today when the patient walks into the Breast Care Center, Esserman can look at her films, do a biopsy, and consult a gynecologist, psychologist, and genetic counselor in the same place. “For the first time,” said Esserman, “we put the woman at the center.”

Source: Victoria Chang and Jeffrey Pfeffer 2003, Laura Esserman, Stanford Graduate School of Business Case Study OB-42A and Chip Heath’s interview of Laura Esserman in May 2009.

Mirror, mirror on the wall

(The image is an exception to positive ways of using mirrors)

This article first appeared in The Economic Times (ET) on 31st March, 2017

A greater degree of self-awareness can make us conscious of what we think, say and do. Self-awareness seems to originate somewhere in the mind. It feels like we become aware of something when we look inside.

But there’s another way of making ourselves self-aware, and that’s literally by looking at ourselves in the mirror. Doing so causes us to reflect on our behaviour and act in more socially desirable ways. Several behavioural science studies validate this phenomenon.

In an interesting experiment, behavioural scientist Arthur Beaman and his colleagues called children to a known local house in the neighbourhood. Aresearch assistant pointed to a large bowl of candies on a nearby table and told the children that they could take one of the candies.

The research assistant then mentionedthat she had some work to do and exited the room, while another research assistant was secretly watching the kids through a hidden peephole. The experiment revealed that over a third of the kids (33.7 per cent) in this control group took more candy than they should have.

The behavioural scientists then called another bunch of kids to the house and repeated the same experiment.

For this test group, they angled a large mirror by the candy bowl in such a way that the kids had to look at themselves in the mirror when they took the candy. Theft rate in the test group was only 8.9 per cent compared to 33.7 per cent in the control group.

Says behavioural scientist Robert Cialdini, “Mirrors could reduce stealing or dishonesty and could even be seen as a good alternative to video surveillance, which is not only costly but sends a signal to people that they’re not trusted.”

In another experiment, led by behavioural scientists Carl Kallgren, Cialdini and R Reno, when participants arrived at their laboratory, half were exposed to a CCTV featuring their own image — it was almost like seeing themselves in a mirror — while the other half watched a CCTV featuring random geometric shapes. The participants were told that their heart rate was to be monitored, which involved placing some gel on their hand.

Once participants believed they were done with the study, they were given paper tissues to wipe off the gel and asked to exit by taking the stairs. The researchers were looking to see whether the participants dropped the paper tissues in the stairs on their way out. The experiment revealed that 24 per cent of participants who saw themselves in the CCTV littered, compared to 46 per cent of those who didn’t see themselves in the CCTV.

There are many studies including two more done by Melissa Bateson and Stacey Sentyrz-Brad Bushman, which have found that mirrors — or other possibilities that produce mirror-like effects — persuade us to behave in more socially desirable ways. People made self-aware are less likely to cheat.

Those made self-aware by acting in front of a mirror or TV camera exhibit increased self-control, and their actions more clearly reflect their attitudes. In other experiments done in front of a mirror, people taste-testing cream cheese have found to have eaten less of the high-fat variety.

We wouldn’t possibly be digging our noses if we saw ourselves in the mirror, would we? On a serious note, two practical behavioural design solutions come to my mind, based on such behavioural science experiments.

One is that customer service executives in face-to-face retail environments have to sometimes deal with customers who are not particularly considerate, or are even rude. Only an experiment can tell if a mirror placed behind the customer service desk could get such customers to behave better. On the other hand, mirrors could also help customer service executives be more conscious of their own appearance, speech and sincerity, thus improving the customer experience.

A second behavioural design solution could be placing mirrors in the corners of staircases of buildings that have stain marks caused by people spitting. Spitting is often an unconscious act where the spitter spits out of habit. A mirror is likely to make people who spit at corners of staircases conscious of their action, preventing them from spitting at those spots.

Sure, spitting in the outdoor environment needs a different behavioural design solution. But for spitting in staircases of buildings, mirrors could be tested to see if they reduce spitting.

How to show off without being labeled as a show-off

Here’s an interesting story we chanced upon that overcomes the dilemma of being seen as a show-off when you may be trying to establish your credentials.

There is a certain real estate agency in the US, which has a sales and a rental division. Customers who would call the agency would typically first speak with a receptionist who, having identified which division they needed to speak with, would say, “Oh, rentals, you need to speak to Penny.” or “You need the sales division, you need to speak to Sheldon.”

Upon the recommendation of a group of behavioural scientists – Robert Cialdini and colleagues – the receptionist started using a slightly tweaked approach. The receptionist would now say, “Oh, rentals, you need to speak to Penny, who has over fifteen years of experience renting properties in this neighborhood. Let me put you through now” or “I’m going to put you through to Sheldon, our head of sales. Sheldon has twenty years of experience in selling properties like yours.”

Everything that the receptionist spoke was true. But for Penny or Sheldon to say the same thing would have been have been at the risk of being liked less and seen as boastful and self-promoting and as a result, not as persuasive. The customers ignored the fact that this introduction came from someone who was connected to Penny and Sheldon and would benefit from this kind of introduction. Penny and Sheldon reported a significant rise in the number of appointments post this Behavioural Design nudge. Lastly, but most importantly, the intervention was costless to the company.

No wonder, inspite of written recommendations being a prominent feature of Linkedin, it has further introduced recommendation of skills, to enhance the user’s credibility as well as LinkedIn’s usability.

By the way did you know that my partner Mayur is a super talented designer?

How the world's best marketer got it wrong, but eventually got it right

The world’s best marketer – P&G launched a brand called Febreze in the US in 1996 as a spray that could remove bad smells from almost any fabric. The spray had been created when one of the P&G scientists was working with a substance called hydroxypropyl beta cyclodextrin (HPBCD). Apparently he was a smoker and one day when he got back from work his wife asked, “Did you quit smoking?” “No”, he said looking suspiciously. “You don’t smell like smoke”, she said.

P&G sensing a big opportunity spent millions perfecting the formula, producing colorless, odorless liquid that could make any stinky couch or jacket scentless. The marketing team decided that they should position Febreze as something that would allow people to rid themselves of embarrassing smells. They created two television commercials. The first showed a woman talking about how her jacket smell of cigarettes when she eats in the smoking section of a restaurant and the other, had a woman speak about her furniture smelling like her dog. In both cases Febreze eliminated the bad smells.

Febreze bombed.

P&G hired behavioural experts to help them figure out the problem and the new solution. When they visited a woman’s home, they observed that though her house was clean and organized, it stinked of her nine cats. The smell was overpowering but the woman couldn’t notice any smell. They figured that even the strongest scent fades with constant exposure. People who needed Febreze the most simply couldn’t detect bad smells in the first place!

They met hundreds of consumers looking for clues how to make Febreze a regular part of their lives. One day they met a woman, who used Febreze everyday. She used to spray Febreze whenever she would finish cleaning a room. Like in the bedroom, she vacuumed, made the bed, plumped the pillows, tightened the bed sheet’s corners, smiled with a sense of accomplishment and then took a Febreze bottle and sprayed it as a final touch. They saw the same pattern across thousands of hours of videotapes of people cleaning their homes.

That was it. The team decided to make Febreze a fun part of cleaning, at the end of the cleaning routine. They added more perfume, so that instead of merely neutralizing odors, Febreze had its own distinct smell. Febreze was repositioned as the nice smell that occurs at the end of the cleaning routine. Instead of eliminating scents, it became an air freshener, used as the finishing touch.  Febreze was relaunched in 1998. Housewives started craving the Febreze scent and the desire to make everything smell as nice as it looked. Within two months sales doubled. Now Febreze sales are more than $1 billion per year and products include candles, laundry detergents, kitchen spays, etc. P&G learned the lesson – no one craves scentlessness.

Source: The Power of Habit by Charles Duhigg. Hear the full story from Charles Duhigg here.

We hate losing more than we love gaining

The tendency to be more sensitive to possible losses than to possible gains is one of the best-supported findings in behavioural science. Nobel laureate Daniel Kahneman and his colleague Amos Tversky were the first to test and document the notion of ‘loss aversion’ – the idea that we are more motivated to avoid losses than we are to acquire gains.

Loss aversion affects a lot of our decisions, in finance, negotiation, persuasion, etc. One consequence of loss aversion is that it makes inexperienced investors to prematurely sell stocks that have gained in value because they simply don’t want to lose what they’ve already gained. (We had also written about it in ‘Why we sell the wrong stocks’) Similarly, the desire to avoid any potential for a loss also makes investors to hold on to stocks that have lost value since the date of purchase. Because selling the stock would mean taking a loss on the investment, which most investors are reluctant to do, a decision that often precedes further stock price decline.

Another popular example of loss aversion is the debacle of New Coke. From 1981 to 1984, Coca-Cola company tested its new and old formulas in taste tests amongst two hundred thousand people across twenty-five cities. 55% of people preferred New Coke versus 45% who preferred the Old Coke. Though most of the tests were blind, in some of the tests people were told which was the New and Old Coke. Under those conditions, preference for New Coke increased by an additional 6%. Why did New Coke fail inspite of such extensive research?

Says Robert Cialdini, Professor of Psychology and Marketing at Arizona State University and advisor to Obama “During taste tests, it was New Coke that was unavailable to people for purchase, when they knew which sample was which. So they showed an especially strong preference for what they couldn’t purchase otherwise. People at the Coca-Cola company might have said, “Oh this means that when people know that they’re getting something new, their desire for it will shoot up.” But, in fact, what the 6% really meant was that when people know what it is they can’t buy, their desire for it will shoot up. Later when the company replaced Old Coke for New Coke, it was Old Coke that people couldn’t have, and it became the favorite.”

For people losing Old Coke was more valuable than gaining New Coke. What this means is that to make messages more persuasive they should be framed to avoid losses more than acquire gains. So a message like ‘Shop till you drop at 30% discount’ could be more persuasive if framed as, ‘Don’t miss the chance to shop at 30% discount’. The latter implies that the deal is scarce in some way (e.g. limited time) and that people could be losing the opportunity to get a good deal.

Sources: Daniel Kahneman and Nathan Novemsky – The Boundaries of Loss Aversion – Journal of Marketing Research 42:119-128 (2005)

Ziv Carmon and Dan Ariely – Focusing on the Forgone: How value can appear so different to buyers and sellers – Journal of Consumer Research (2000)

G.R. Shell – Bargaining for advantage (1999)

There's atleast one benefit of having a common name

Everyone I know who is told that his/her name is common gets peeved, including myself. But hey we found one huge benefit of having a common name.

In a study by researcher Randy Garner surveys were sent by mail to complete strangers. Accompanying the survey was a request to complete and return it to the person whose name was either similar or dissimilar to the name of the survey recipient. So a person whose name was Robert Greer got the survey from Bob Gregar or a woman named Cynthia Johnston got the survey from Cindy Johanson, in the similar name group. The dissimilar name group of course got surveys from dissimilar-sounding names. Those who received the survey from someone with a similar-sounding name were twice as likely to fill out the surveys than names that were dissimilar (56% compared to 30%).

Findings such as this one show the power and subtlety of similarity as a cue that people use to decide whom to help. That’s why pointing out similarities in any domain, including names, birth dates, religion, hometowns, schools, alma mater, etc. in discussions with any person before making your request or presentation could get you a favorable response.

Alternatively, if you’re designing a program/project/initiative/product for a particular client, you can harness the power of people’s natural tendency to be attracted to things that remind them of themselves in the name, title or label that you give it.

Source: Randy Garner – What’s in a Name? Persuasion Perhaps – Journal of Consumer Psychology (2005)

When should you admit you are wrong?

Imagine you are the Marketing Director of one of the reputed airlines and your airline has frustrated hundreds of passengers due to lack of preparation and poor decision-making in the face of severe winter weather. All other airlines cancelled flights in anticipation of severe weather and returned to normal service within few days. In contrast the airline that you are the Marketing Director of, gave hope to passengers that the planes would fly – yet remained out of service for many days. In short your airline let customers down. Would you focus the blame on external weather conditions or on internal factors relevant to the company’s operation?

If you chose external weather conditions, you should leave your job and join an airline like Air India. You will probably find a lot of like-minded people there. Or may be the organization you work with is like Air India and would not support your decision. But if you chose to focus on internal factors relevant to the company’s operations, consider yourself a brave person, with a good sense of humility, to have admitted one’s mistake. Indeed a very rare thing amongst people and organizations. And if you would have chosen to acknowledge internal factors, not only would it benefit your organization, it would benefit your career too. Let me tell you why.

Says behavioural scientist Fiona Lee and her colleagues say that “Organizations that attribute failures to internal causes make it appear as having greater control over its own resources and future. The public might assume that the organization has a plan to modify the internal features of the organization that may have led to the problems in the first place.”

Lee and colleagues have tested this idea by conducting a study in which participants read one of the two annual reports of a fictitious company, both of which explained why the company performed poorly over the last year. For half of the participants, the annual report blamed internal (but potentially controllable) factors for the poor performance and for the other half, the annual report blamed external (and incontrollable) factors for the poor performance. Turned out that the first group viewed the company more positively on a number of different dimensions than did the second group.

Not just that, the researchers collected statements from actual annual reports of 14 companies over a 21-year period and discovered that companies that pointed to internal factors to explain failures had higher stock prices one year later than those that pointed to external factors.

Organizations that attribute failures to internal causes come out ahead not only in public perception, but also in terms of profit line. No reason to believe why it should not work for individuals. So next time you make a mistake, admit it and follow it up with an action plan demonstrating that you can take control of the situation and rectify it.

Source: Lee, F., & Peterson, C., & Tiedens, L. – Mea culpa: Predicting stock prices from organizational attributions – Personality and Social Psychology Bulletin 30(12): 1-14 (2004)

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