Use Behavioral Science To Perfect Your Company's Service


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This presentation tries to summarize an article by Richard B. Chase & Sriram Dasu which appeared in HBR June 2001 edition.

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Use Behavioral Science To Perfect Your Company's Service

  1. 1. Richard B. Chase & Sriram Dasu<br />Want to Perfect Your Company’s Service?<br />Use Behavioral Science<br />Summarized by,<br />AnubhavVanmali<br />Sharadkumar R Bhatt<br />Siddharth Anand<br />Symbiosis Institute of Business Management, Bangalore<br />
  2. 2. Introduction<br />Examining Service Encounters from the customer’s point of view<br />The feelings that customers experience during these encounters<br />Insights from behavioral science into better service management<br />Translating these into operating principles for service-encounter management<br />
  3. 3. Applied Behavioral Science<br />In any service encounter – from a simple pizza pickup to a complex, long-term consulting engagement- <br /> “perception is reality”<br />
  4. 4. Sequence Effects<br />When people recall experiences, they remember snapshots, not movies<br />Experiences are assessed based upon:<br /><ul><li>Trend in the sequence of pain/pleasure
  5. 5. The high & low points
  6. 6. The ending</li></ul>They pay attention to the rate of improvement in a sequence<br />
  7. 7. Duration Effects<br />People who are mentally engaged in a task don’t notice how long it takes<br />They overestimate the time elapsed<br />Increasing the number of segments in an encounter lengthens its perceived duration<br />Unless an activity is much longer or much shorter than expected, people pay little attention to its duration<br />The pleasurable content & how it is arranged dominate assessments<br />
  8. 8. Rationalization Effects<br />Counterfactual Thinking/ Second-guessing<br /><ul><li>People desperately want things to make sense
  9. 9. If there’s no handy explanation, they’ll concoct one</li></ul>People:<br />View the likely cause as a discrete thing<br />Conclude that deviations from rituals/norms caused the unexpected<br />Tend to ascribe credit/ blame to individuals, not systems <br /> (Put a human face on the problem)<br />
  10. 10. Principle 1 : Finish Strong<br />The end is far more important because it remains in the customer’s recollections<br />People’s innate preference for improvement<br />Examples:-<br />Commercial websites<br />Consulting: Schedule the project so that a golden nugget or two appear at the end of the engagement<br />Airlines: Focus on the last encounter- Baggage Collection<br />
  11. 11. Principle 2 : Get the Bad Experiences Out of the Way Early<br />People prefer to have undesirable events come first- so they can avoid dread- and to have desirable events come at the end- so they can savor them<br />Unfortunately, service providers dread delivering bad news, so they delay it until the last possible moment - Exactly the wrong thing to do<br />
  12. 12. Principle 3 : Segment the Pleasure, Combine the Pain<br />Gambling - Prefer winning $5 twice over $10 once<br />Clinics – Let patients spend more time in waiting room so they don’t have to endure a second, third or fourth wait in the examining rooms<br />Service companies should cut the number of steps to reach the final destination, thereby reducing the pain of waiting<br /><ul><li>Trade Shows
  13. 13. Disney’s Theme Parks ( Two 90 Sec rides better than One 3 min ride)</li></ul>Both halves of the principle:<br />
  14. 14. Principle 4 : Build Commitment Through Choice<br />People are happier and more comfortable when they believe they have some control over a process, particularly an uncomfortable one<br />Patients, when involved in decisions, feel less helpless, less hopeless & more committed to making the process work<br />Hotels – Alarm clock vs. Wake-up call<br />Xerox Servicing - Choice over schedule<br />
  15. 15. Principle 5 : Give People Rituals, and Stick to Them<br />Rituals are used to mark key moments in the relationship, establish professional credentials, set expectations, and get feedback<br />“McKinsey grunt—uh-huh, uh-huh”<br />Not getting the weekly call from the consultant on a project, not copying the CEO on a progress report, not returning phone calls immediately – any of these lapses can be blamed after the fact for a failure<br />
  16. 16. The Right Remedy<br /> Process-based remedies should be applied to process-based problems and outcome-based remedies should be applied to outcome-based problems<br />
  17. 17. Conclusion<br />Service encounters can be engineered to enhance the customer’s experience during the process and his/ her recollection of the process after it is completed<br />Behavioral science, applied with equal doses of empathy and imagination, can improve service delivery<br /><ul><li>It can change the impressions that your customers remember</li></li></ul><li>Thank You!<br />