Behavioural Science: The Secret Sauce to Elevating Customer Experiences

Behavioural Science

By Niluka Kavanagh

Behavioural science is a powerful tool for designing better customer experiences. In this article, Niluka Kavanagh explores how it can be used in three stages. From mapping the “as is” experience and gaining a deeper insight into your customer, to designing the future experience, to the importance of constant experimentation and testing to improve the customer journey overtime.

It’s dinner time. You’re on holiday and you are looking for a restaurant to eat in. You see one with lovely décor, a fantastic menu and friendly staff. Mind you, it’s almost empty. You see another that is less fancy, with a smaller selection of dishes to choose from. It’s filled with groups of people inside. A family pass you by and go to the waiter, requesting a table. You notice a queue is starting to form of people lining up.

Which restaurant do you choose?

Chances are you will choose the second restaurant due to a phenomenon known as social proof.1 This bias tells us that humans are more likely to follow the actions of the group. We are, by nature, tribal creatures. Sensing the happy faces and bustling groups of people, we are more likely to believe the second restaurant will provide us with the better experience, even if we lack the empirical evidence to prove this.

How you desiagn experiences must factor in such cognitive biases. This can be done through applying behavioural science.

The increasing importance of behavioural science in designing customer experiences

All companies should strive to create an exceptional customer experience. With consumers caring more and more about the experiential value in what they buy, strong customer experiences are no longer a nice to have, but a must-have.

There are multiple strategies, methods and frameworks to help drive great customer experiences and improve business performance. KPMG’s Six Pillars of Excellence is a leading example of one framework, setting out the six key elements that drive exceptional customer experiences (Empathy, Expectations, Resolution, Time & Effort, Integrity and Personalisation).2

But how can we use behavioural science in this space?

Let’s first begin by looking at the very term “customer experience”. It’s the experience of a human, in this case, the customer. A human that is hard-wired and underpinned by emotional needs. A human more likely to be driven by what’s known as ‘System 1’ thinking (intuitive, emotional, instant) rather than ‘System 2’ thinking (rational, measured, thoughtful).3

By understanding the deeper instincts of the human (the customer) we can design better experiences that are more likely to meet their deeper needs and desires. The result? Happier customers who can become advocates of your brand and ultimately lead to better returns for your organisation.

When designing better customer experiences, behavioural science can be applied in three stages. First, mapping the current experience, second, designing the future experience and third, testing the experience for continual improvement.

Stage one: Mapping the current experience and getting beneath the skin of the customer

The first step is to map the current “as-is” experience, in order to identify future areas of opportunity. Behavioural science can be used to gain a deeper understanding of the unmet needs, pain points, and moments that matter for customers in the journey.

But how do we do that?

The first rule of behavioural science is that what humans say and what humans think and do can be different. Behavioural science can help us mitigate this challenge by helping us get closer to the “truth” when collecting customer insight about the existing experience.

Behavioural science

1. Be thoughtful in your survey design

Firstly, behavioural science can be used when designing surveys.4 Care should be made to ensure questions are not leading or solely based on opinion. Surveys should be designed to pivot away from standardised scale & ranking questions. Artificial Intelligence can be incorporated within the survey architecture to probe specific words after an initial response, encouraging longer responses with greater elaboration that go deeper into the customer’s perspectives. Questions should be designed to get to the heart of the customers actions (what they actually do) as opposed to simply surfacing their opinions.

2. Gain timely feedback

Make it easy for customers to feedback immediately after (or as close as possible) to the touchpoint in the customer journey you want to learn more about. This is because humans have the tendency to post-rationalise moments and/or fail to recollect moments in an accurate way. It is for this reason airports have stands that ask customers to press a button to “describe their experience today” with faces denoting good, okay and bad immediately after check-in. These are deliberately placed to give a ‘live’ pulse check, rather than sent in a survey later when the moment will be hazier in the customer’s mind. By using technology platforms like Medallia, surveys can be sent just after the touchpoint itself to collect insight.5

3. Run ethnography and on-the-ground observations

Observing and speaking to customers through field work is another powerful way to gain insight into the experience itself. This is known as ethnography – an observational science around studying human behaviour.6  Being on the ground in the environment itself will allow organisations to witness and hear how customers interact at the different stages of the journey. If this seems practically difficult to do, you’re in luck. New tools allow for digital ethnography, a way to virtually observe your customers while they are interacting with your product or service.7 This is not far removed from eye-tracking technology used to understand how the customer interacts with a website.8 

Once insight has been gathered through these techniques (surveys, timely feedback, ethnography) it is possible to identify the pain and gain points across the customer experience and map the end-to-end journey in the “as is” state. It is also key to map the ‘Moments that Matter’ for the customer. Moments that Matter is a term used in the CX space that refers to those critical moments that could make or break the whole customer experience. They should be given priority, because this is where the customer will see the most value, should it be executed well and – by contrast – where most is at stake, should it be handled poorly.9

Once the pain points, gain points and Moments that Matter have been identified across the customer experience, behavioural science can then be used to analyse these in more detail. What are the cognitive biases that lie behind these?

Take a leading chain coffee brand. If the staff are overstretched, a customer may cite that the length of time between making the order and waiting for the order to arrive is too long. It should be faster, in line with what they would expect from a well-established brand. When the coffee is eventually received, it is of an OK standard. Both are pain points that tie into what’s known as expectation theory, a bias that states “our expectations of a product or service shape our perceived performance of them”.10  The customer expected a fast coffee order and didn’t receive it. As such, the coffee tasted sub-par. You may want to contrast this to an independent, boutique coffee shop where a longer waiting time is more likely to be expected. 

In this example, the coffee high-street brand needs to consider expectation theory and ensure that their experience is in line with what customers expect. Most of us would assume a leading coffee chain to deliver with good speed. If that’s not the case, our disappointment may make us rate the coffee less than we would have done otherwise.

By analysing cognitive biases and heuristics like these, a richer understanding of the customer can be gathered – which is critical for the second stage of the process.

Stage two: Designing the future experience and using nudge-theory to create desired behaviours

Once the “as-is” experience has been mapped, it is time to design the future experience and create a journey that is better for customers.

One behavioural science application regularly applied at this stage is nudge theory, a concept that proposes positive reinforcement and indirect suggestions to influence the behaviour or decisions of an individual.11 It can be a powerful tool used by organisations to prompt customers to behave in desired ways across the end-to-end journey.

One example of nudge is using slow, relaxing music within a restaurant environment to encourage diners to take longer at the table and in turn, increase the chances of them spending more.12

One behavioural science application regularly applied at this stage is nudge theory, a concept that proposes positive reinforcement and indirect suggestions to influence the behaviour or decisions of an individual.

When designing the future experience, organisations should consider where and how nudge theory can be used across the customer journey. If one pain point when doing a tax return is that the customer is frustrated at having to complete a lengthy and complex form (and therefore avoids doing so), nudge theory can help reduce this challenge, for example by using existing data to pre-populate standardised fields. The process becomes faster and easier, “nudging” the customer to complete their return.

Nudge theory is a powerful technique that can be used to design exceptional customer experiences and encourage the customer to move through the entirety of the journey.13

Stage three: Testing the future experience through constant iteration and improvement

Another fundamental aspect of behavioural science is the importance of experimentation and testing. Because human-beings are complex and have evolving needs, it is critical that organisations continually test the customer journey to ensure it delivers against (and exceeds) customer needs over time.

Constant iteration is required. This can be achieved through the development of prototypes which can be used to showcase immersive experiences and, in real-time, test customers reactions and identify areas of improvement. “Test tube” experiments are key, especially during agile product or service development cycles.14 

A/B testing in website design is a very simple example of using behavioural science to continually test and optimise the customer experience. It allows organisations to effectively gather data on which of the two website versions (A or B) creates most engagement with customers.

It is critical that testing and experimentation is done on a frequent basis to keep up with the ever-evolving needs of the customer and ensure a desirable experience.

Closing thoughts: a powerful application

Behavioural science is a powerful application that organisations should seek to use when designing their customer experience. From mapping the current experience and understanding the customer, to designing the future experience, to constantly seeking opportunities for improvement. When designing the customer journey, we must remember that there is a human at the forefront of this, a human who is deep-rooted in cognitive biases and behaviours used at each touchpoint of your customer journey.

When done correctly, behavioural science can help improve your customer experience, leading to increased growth and better returns for your organisation.

About the Author

Niluka Kavanagh

Niluka Kavanagh is a consultant at KPMG UK in the Customer Consulting practice. She is one of the founders of the KPMG Behavioural Science Unit. Her areas of expertise include marketing, brand strategy, customer experience, communications and behavioural science. Outside of work, Niluka is also a writer and a public speaking coach.

This article is the updated version of Behavioural science: the secret sauce to elevating customer experiences that was originally published in KPMG on 10 June 2021. It can be accessed here: https://home.kpmg/uk/en/blogs/home/posts/2021/06/behavioural-science.html

References

  1. The term “Social Proof” was first coined by Robert Cialdini in his 1984 book Influence: Science and Practice, while the most famous study of social proof is Muzafer Sherif’s 1935 experiment.
  2. The Six Pillars of Customer Experience Excellence | KPMG
  3. Thinking, Fast and Slow; Kahneman Daniel; Penguin Books; 2012
  4. The role of surveys in the age of behavioural science
  5. Medallia | Customer Experience and Employee Experience
  6. https://www.scribbr.com/methodology/ethnography/
  7. A guide to digital ethnography | Opinion | Research Live (research-live.com)
  8. https://www.usability.gov/get-involved/blog/2010/03/eyetracking.html#:~:text=Eye%20tracking%20is%20a%20useful,a%20user%20searches%20for%20information
  9. Customer Relationships and Moments That Matter | CX Journey™ (cx-journey.com)
  10. The Choice Factory; Shotton, Richard; Harriman House; 2018 (p77-83)
  11. https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/nudge/
  12. The Influence of Background Music on the Behaviour of Restaurant Patrons; Milliman, Ronald; The Journal of Consumer Research; Volume 13, No2, 1968
  13. Nudge: Improving Decisions about Health, Wealth and Happiness; Thaler, Richard, Sunstein Cass; Yale University Press; 2008
  14. Chapter 3, Test Tube Behaviours in The Behaviour Business; Chataway, Richard; Harriman House; 2020 (p27-36)

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.