Research conducted by Proctor, a division of Imparta Ltd. focusing on the customer contact market, found that “nudging,” or behavioral economics, can effectively boost sales and customer satisfaction. Although the hypothesis that behavioral economics is effective at improving customer experience, it has never been thoroughly researched until now.
Procter tested behavioral economics using large companies from the FTSE 100 to prove or disprove if “nudging” actually works to increase the bottom line and keep customers happy.
Jo Thomson, managing director at Procter, stated in a press release, “It has been hypothesized for some time that the use of behavioral economics has great potential for increasing customer satisfaction and sales conversion through redesigning the way the customer conversation is handled – with a focus on using specific words, actions and attitudes that ‘nudge’ the customer in the right direction. Hypothesizing, however, is very different from proving, and the results of our research have revealed more significant results than even we had expected”
The results of Procter’s research will be detailed at Kettners in Central London.
Behavioral economics is the study of more than 20 different behavioral techniques that directly influence customer experience. A few of these techniques include loss aversion, language framing and distinction bias. The core of this study is that consumers aren’t rational or objective when it comes to buying behavior.
Professor Daniel Kahneman, winner of the Nobel Memorial Prize in Economics, has been a strong proponent of Behavioral Economics. He has authored several books on the topic, including “Nudge” and “Predictably Irrational.”
To detail behavioral economics a bit further, Imparta Ltd., offers an example of language framing that was published in the Harvard Business Review. It states, “Imagine your 11 a.m. flight is cancelled and you need to be in Cleveland tomorrow morning. There’s an evening flight that’s open. Where most reps would simply say ‘I can put you on a flight leaving at 9.00 p.m.’ other reps might say ‘well I know I can put you on the 7 a.m. flight tomorrow, but let me see what I can do to get you on the earlier flight, which is at 9 p.m. tonight.’ A less desirable option creates a mental anchor, making the best alternative seem more acceptable.”