Better Customer Communications with Behavioural EconomicsEmma Williams – Barclays

Jamie Halliday – The Behavioural Architects

Why Behavioural Economics?

Everyone needs banking, no-one needs a bank

Designing empathetic experiences

Creating emotionally valuable products

Enabling mutually beneficial relationships

Customer perspective ≠ your perspective

Crucial to step back and think aboutthe subject via the customer’s eyes

Customer

• Are immersed in the background & context of the situation

• Can take a ‘legalistic’ approach – if it’s written down, we’ve told them

• Use ‘jargon’ and complex terminology day-to-day

• Probably haven’t even thought about it before today

• Don’t always pick up on every point, especially in ‘wordy’ emails

• Need simple explanations of terminology

Internal team

It’s easy to lose sight of how the customer thinks, feels & behaves

Here comes the science…

A model of thinking that acknowledges theinherent biases and distortions that

characterise human judgment and decision-making

The latest learning from the behavioural sciences and psychology applied to consumer behaviour

Behavioural Economics is…

#1. Much of what influences behaviour is subconscious /

below the surface

What Behavioural Science tells us about human behaviour

“The estimate from neuroscientists is that

our five senses are taking in 11 million

pieces of information every second.

And how many of those are we processing

consciously? A mere 40!”

Source: Weinschenk, 2009

When asked: (1) “How happy are you with your life in general?” and (2) “How many dates did you have last month?”

There was no significant correlation between the two answers...

But there was a correlation when the order was reversed with another sample!

Changing the order of two questions can radically impact the response

Priming

Priming – test yourselfPriming

Priming – test yourselfPriming

Are we using the right words, images (+ anything else) to put

customers in the right mood for the desired behaviour?

Applying Priming

#1. Much of what influences behaviour is subconscious /

below the surface

#2. We have different modes of thinking – System One &

System Two

What Behavioural Science tells us about human behaviour

SYSTEM 1Automatic, quick,

intuitive, emotional...

SYSTEM 2Conscious, effortful,

logical, deliberate...

Limited processing capacity, just 40 ‘bits’

per second!

High processing capacity –

~11 million ‘bits’ per second

Two systems of the mind

A question of production…

If it takes 5 machines 5 minutes to make 5 widgets…

How long does it take 100 machines to make 100 widgets?

Another simple question…Jamie drives the 400 miles

from London to Edinburgh at

60 mph

The next day he drives back at

40 mph

What is his average speed?

#1. Much of what influences behaviour is subconscious /

below the surface

#2. We have different modes of thinking – System One &

System Two

#3. We are hugely influenced by the context around us and

use anchors, shortcuts and rules of thumb to navigate this

context and make decisions

What Behavioural Science tells us about human behaviour

Take a chocolate…

Anchors & reference points for communications- influence how we perceive & value content

Media coverage Competitors

Other comparable service providers

Small changes in how information is presented can dramatically change the resulting decision or behaviour

FramingFraming

Different ways to frame the same infoFraming

How can you reframe messages to feel more positive to a

customer?

Applying Framing

#1. Much of what influences behaviour is subconscious /

below the surface

#2. We have different modes of thinking – System One &

System Two

#3. We are hugely influenced by the context around us and

use anchors, shortcuts and rules of thumb to navigate this

context and make decisions

#4. We are subject to a host of biases that significantly impact

our behaviour

What Behavioural Science tells us about human behaviour

We have limited resources of conscious awareness “Inattentional blindness”

Can you spot the clues?

Priming

Framing Power of Now

Social Norms

Authority Bias

Loss Aversion

Endowment bias

Egocentric Bias

Chunking

Peak End Rule

Reciprocity Bias

Anchoring

A range of psychological biases influence response to comms, e.g.:

That’s all very interesting, but so what?

The Power of BE…

BE gives us a framework and concepts to understand customer behaviour

and how to nudge and steer it

Our Challenge: Improving Premier Comms With its customer-centric culture, Barclays is always looking at new and innovative ways to better engage with customers and improve their experiences of interacting with Barclays. Led by the Premier Insight and Engagement teams, in collaboration with The Behavioural Architects, Barclays has been pioneering a programme that cements Behavioural Economics at the centre of communication development, affecting real cultural and behavioural change. Within Barclays, Premier customers are a key segment. These customers are affluent, with sophisticated and complex financial needs, and high expectations to match. As a cohort they have many demands for their attention and energy. Prior to commissioning this project, Barclays had identified an opportunity to optimise the effectiveness of their communications (letters & emails) with Premier customers & ensure that principles of best practice were applied consistently across all communications. Barclays commissioned TBA to review their approach to customer communications at a strategic level with the specific aim of applying behavioural science principles to inform & optimise the development of communications for Barclays’ Premier customers. More effective communications will ultimately drive value for the business by ensuring that customers perform the desired behavioural outcomes.  The subject matter of the communications they receive is frequently technical and subject to legal and compliance requirements. Communications also vary in complexity, depending on the specific objective at hand, and a range of customer behavioural outcomes may be desired, including: 

Ensuring customers understand and absorb key messagesEnsuring customers act on information as requiredDriving customer engagement

Our challenge:

Better conversations with our customers.

• Ensuring customers understand and absorb the information we give them.

• Making it easy for customers to take appropriate action.

Creating our Framework

3. TOOLS FOR BEHAVIOURAL INSIGHT

Seek insight into the drivers of real behaviour (not just

what people tell us)

2. THE ‘ECOSYSTEM’ OF BEHAVIOURAL INFLUENCES

Apply models & concepts from a behavioural science

1. THE BEHAVIOURAL CHALLENGE

Identify the specific behaviour(s) that we want to

happen.

Anchors the whole approach around a

behaviour

Provides a behavioural science foundation for all

activities

Uncovers what people do & feel, not what they think

they do

The TBA philosophy: place behaviour at the heart of the project

We started by developing hypotheses about what drives effective communications

30 example communications

Audit with a BE-lens

Hypothesise areas of improvement

Build initial ‘BE’ framework for analysing communications

Making the research context as real as possible - at home, at a time that is convenient to them

Reveals customer reactions that we cannot

predict

e.g. Areas of confusion?What are customers’

anchors?What does a customer value about a service?

Rich & powerful video feedback

More considered analysis (System 2) after had time to

digest

Instant response – evidence of BE biases in

action

Cognitive Ease

Cognitive Strain

System 2 mobilized – high effort, problematic More likely to:- Be vigilant- Be suspicious- Make errors

System 1 active – intuitive, low effort, automaticMore likely to:- Be in a good mood- Like what you see- Believe what you hear

Positively affects how someone perceives, understands and

experiences something

Less pleasant state – can lead to tiredness, stress and snap

judgments✔

Cognitive strain occurs when more rigorous thinking is required and System 2 is engaged. It can lead to negative

emotions.

Key concept: Cognitive Ease vs. Cognitive Strain

BE in Action

BE tell us how to play to biases…How to create cognitive ease…

“I think the email is excellent, it is brief with straight forward

bullet points… it was clear where to go from

there.”

“The letter was clear enough, I think putting the "headlines" on page one and then elaborating about them on page two worked well.”Chunkin

g

Salience

“Sometimes I only skim read letters like that from the bank to see if they

relate to me – so the title needs to grab my

attention.”

…which translates into detailed, practical guidelines

…which is then developed into a formal structure & socialised

COMMS TOOLKIT• Communications development

tool • Checklist of BE principles• A BE Handbook - easy reference

guide• Before and after examples

BESPOKE TRAINING COURSE• Worked example of applying the

communications toolkit• Internal & external comms

professionals

BE

Success to date A FRAMEWORK to audit communications and develop hypotheses

about behavioural outcomes.

Communications TOOLKIT with key Behavioural Economics concepts brought to life with feedback from actual customers for use in communication development

A bespoke TRAINING COURSE for Barclays staff and support agencies to embed the concepts

A PREMIER FORUM for approving all Premier customer communications through a Behavioural Economics lens

ROLL-OUT of process to other businesses within Barclays

Improvements in key CUSTOMER engagement and satisfaction measures

I want to learn more! Coursera https://www.behavioraleconomics.com

http://www.thebearchitects.com/behavioural-economics/what-is-be/