We all know that if we can influence customers’ behaviour, we stand a better chance of succeeding in our business goals. In order to understand the science of customer behaviour, especially in digital environments, this month we read, “The Behaviour Business: How to apply behavioural science for business success” by Richard Chataway.
Chataway is one of the most experienced behavioural science practitioners in the UK, and is VP of the BVA Nudge Unit.
His book The Behaviour Business argues strongly that much of human decision-making is more emotional, less rational, and more instinctive than we assume. It also suggests that – as a result – a lot of our behaviour is heavily influenced by context and our innate biases.
Chatway lays out a path for helping change, or nudge, the ‘choice architecture’ – basically, the framework in which we help our customers and employees make decisions. In doing so, we can change their behaviour.
This is useful for understanding customers on a number of levels, as often the customer choice architecture is under our control as businesses. As customer experience and employee experience practitioners, this book also helps us to understand how people decide things. For example, how and why do they decide to chose us versus a competitor? What delights them, and what makes them decide to leave?
With that, grab a coffee and let’s take a look at our key takeaways from the book:
The Behaviour Business: Top takeaways and quotes
Chataway underlines the point that, when it comes to decision-making, we think less than we think we think. He refers back to Daniel Kahneman’s seminal research (Thinking Fast and Slow) and looks at our decision making as “system 1” or ‘fast’ thinking, and “system 2” thinking which is more rational and considered.
“If there is one thing to learn from behavioural science, it is this: what people do is often not the same as what they say they do, or intend to do. If a business does not employ this understanding of how people make decisions – that they are frequently driven by subconscious or external factors they are not aware of – they are wasting the business’s money.”
He explains that scientists think we make between 90% and 95% of our decisions using system 1 thinking. We are, he claims, a lot more like Homer Simpson than we think we are. This is because we (and our customers) are overburdened with information, stimulus, and stuff, and so we shortcut a lot of decisions using our system 1 thinking.
Add on to this the fact that humans tend to give more credence to information that confirms their existing views and you have an interesting model. Customers will decide things quickly, and will also decide things that reinforce how they already feel.
“A subtle, often seemingly insignificant change to the ‘choice architecture’ – the way a choice is presented… influences the choice taken”
The book is heavily influenced by the ‘nudge’ theory (Thaler & Cass). Nudging is a popular way of, ultimately, helping make change and choice easier for people. As Chatway says. nudging and behaviour change focus on ‘more emotive and immediate short-term effects that leverage heuristics and biases.’
He suggests we think about nudge as “a subtle, often seemingly insignificant change to the ‘choice architecture’ – the way a choice is presented – which influences the choice taken”
In other words, by using a series of psychologically-informed nudges, we can make it easier for customers to choose certain products or achieve certain paths. It boils down to helping customers make a series of easy, small changes or choices, rather than one big one.
These theories have been put into practice to help people stop smoking and help them make healthier choices. For example, it’s been shown that putting healthy food on the more accessible shelves in supermarkets increases the number of people buying those products rather than healthy snacks.
Extending the nudge theory out to influence customer choice, Chataway says, ‘if nudging behaviour is easier, cheaper and reflects sentiment towards the business and brand, then, by definition, it is a more profitable approach than the alternatives.”
“How you say something is as important as what you say (especially in customer service)”
Chataway refers to a program he worked on for a major bank where he was asked to look at long call handling times and calls that were not resolved on first contact. Immediate the mind runs to training issues, poor agent information etc. What he actually discovered was that the bank’s customer service identity checks felt “interrogatory” to the customers calling in for help.
Because they felt they were being interrogated, they panicked and forgot their security information. They therefore either (a) took longer to clear security and were flustered once they had or (b) failed security and had to call back. Chatawat discovered that by ‘nudging’ the customer service agents’ language a little bit, by making it less confrontational, he was able to both reduce the call length, increase customer success (ie they passed the security checks) and reduce the stress the customers felt in making the calls in the first place.
Observing behaviour in customers, rather than relying on instinct and therefore bias as to why things are happening, is a crucial takeaway from every chapter in this book.
“The most successful digital companies of the 21st century have minimised consumer cognitive effort… that go with the grain of behaviour, reduce friction, and make choice as easy as possible.”
Experiences that are effortless turn into habits.
Amazon for example, is a system 1 habit for many people. The company designs its shopping experience to be exactly that, a habit. With its ability to check out as a guest, 1-click ordering, next day delivery and intuitive recommendation engine it’s easy, effortless and habit-forming.
By making things easy, Chataway argues, FANG (Facebook, Apple, Netflix, Google) are making them more addictive, more habitual for us as consumers.
This concept comes up again and again in service design and customer experience – the concept of making things easy and effortless so that our customers will be happy (even looking forward to) repeating the experience of dealing with us. (check out our review of Good Services by Lou Downe as an example)
The areas you can reduce friction and effort in the customer journey aren’t always obvious. Thus, Chataway argues, the commonality between innovative companies is how many experiments they run. He also points up that you have an enormous advantage in experimentation when your product is essentially a website (as opposed to a physical item).
“Much market research is flawed and we are poor prediction machines”
Chataway has an excellent chapter on the application of behavioural science to customer understanding – it’s worth the cost of the book alone. He demonstrates how much market research is subject to post-rationalization. The unreliability of the human memory, coupled with the fact that we often don’t think very hard about experiences, brands, ads or products until specifically pushed to do so, means that much of what we remember about companies is flawed, misremembered or simply said to please the researcher!
And even when we have market research to utilise, Chataway highlights that we – as humans – are terrible at forecasting. (N.B. There is a great book on forecasting called Superforecasting, check out our notes from that book here.) He argues that any company relying on predictions of consumers’ behaviour in the future runs a significant risk of consumers making a biased guess. This, he argues, is why there are so many failed product launches each year. “At the end of the day, what consumers told us they would do, and what they actually did, were different things.” laments the CEO of one such failed venture.
This could be linked to another phenomenon covered in this chapter – that humans often make choices based on avoiding risk rather than maximising potential gain. The old “no-one ever got fired for buying IBM” adage springs to mind here.
Chatway thus argues we need to reduce complexity, and reduce choice to help customers make easier “good enough” decisions.
In summary, an excellent and insightful book, which CX practitioners will find useful for designing services, websites, information and scripting for agents. Plus, it’s a fascinating read on behavioural psychology to boot.
Every month, we read the best and most useful business books for customer experience and employee experience professionals. If you want a shortcut to the ultimate business library, get stuck in to our top business book reviews here.