Notes

Outline

Behavioural Science Can Perfect Your Company’s Business

Current cults  in service industries Moments of truth Service recovery Delighting the customer

Have we overlooked something? Yes. The underlying psychology of service encounters – the feelings that customers experience during these encounters, feelings so subtle they probably couldn’t be put into words.

Recent findings of behavioural science How customers experience the passage of time: when time seems to drag, when it speeds by, and when in a sequence of events an uncomfortable experience will be least noticeable How customers interpret an event after it is over.

Formation of perceptions 1. Sequence Effects: When people recall an experience, they don’t remember every single moment of it – they recall a few significant moments vividly and gloss over the rest – they remember snapshots, not movies The overall assessment of the experience is based on three factors: the trend in the sequence of pain or pleasure, the high and low points, and the ending.

Formation of perceptions 2. Duration Effects: People mentally engaged in a task don’t notice how long it takes When prompted to pay attention to the passage of time, people overestimate the time elapsed Increasing the number of segments in an encounter lengthens its perceived duration.

Duration effects … If perceptions of time’s passage are so subjective, when does duration matter? Unless an activity is much longer or or much shorter than expected, people pay little attention to its duration Reasons: they focus on the pleasurable content of the experience and how it is   arranged – rather than how long it takes service encounters are rarely identical in length, so people have only general reference points for evaluating duration – their estimates of how long it will take are usually fuzzy.

Formation of perceptions 3. Rationalisation Effects: People desperately want things to make sense. They view the likely cause as a discrete thing, not a continuous intertwined process People often conclude that deviations from rituals and norms caused the unexpected outcome People tend to ascribe credit or blame to individuals and not to systems. Cont…

"Rationalisation Effects:" Rationalisation Effects: People are far less apt to ‘search for the guilty’ if they think they’ve had some control over the process that occurred. The more empowered and engaged they feel, the less angry they are when something goes wrong People want explanations, and they’ll make them up if they have to!

Emerging Principles Finish Strong The end is more important because it’s what remains in the customer’s recollections Get the Bad Experiences Out of the Way Early People prefer the undesirable events first  - so that they can avoid dread – and to have desirable events come at the end  - so they can savor them Segment the Pleasure, Combine the Pain Two 90 second rides at Disney last longer than one three minute one. Cont…

Emerging Principles Build Commitment Through Choice People are happier and more comfortable when they believe they have some control over the process, particularly an uncomfortable one Give People Rituals & Stick to Them People find comfort, order, and meaning in repetitive, familiar activities Deviation from rituals is often cited as the cause of a failure – particularly in professional services, where customers have difficulty evaluating precise causes and effects.

Conclusion Ultimately, only one thing really matters in a service encounter – the customer’s perceptions of what occurred. Service encounters can be engineered to enhance the customer’s experience during the process and her recollection of the process after it is completed.

Acknowledgements Want to Perfect Your Company’s Service? Use Behavioral Science. Chase and Dasu. HBR. June 2001 Is Your Company Ready for One to One Marketing? Peppers et al. HBR. Feb 1999. The Mismanagement of Customer Loyalty. Reinartz, Kumar. HBR. July 2002.

Thank You