By Gina Cocking
I listened to a recent Freakonomics podcast that discussed how behavioral economics can be used to improve the productivity in a sales call center. Stephen Dubner interviewed Rory Sutherland and other team members of Ogilvy Change.
Ogilvy Change uses cognitive psychology and behavioral economics in consulting and did a project for a newspaper call center. The problem: customers wanted to drop their subscription after the newspaper raised prices. The consultants had the call center employees use subtle behavioral techniques resulting in customer service agents being 3x more likely to be successful and a 80% save rate of a customer/sale.
1. Social norming: This is an academic term for “peer pressure”. “Many people like you are also busy/cash strapped etc.” If customers know what decisions people like themselves are making, it is easier for them to make a decision. Individuals are thinking, ‘other people think this is a good idea, it may be for me too’.
2. Loss aversion: “I wouldn’t want you to miss out on this opportunity…” The principal of loss aversion is that people experience more pain with loss than pleasure with a commensurate gain. Another way of saying this is people are more upset by losing $2 than by gaining $4.
3. Reframing: Use positivity to reframe topics. “We are so confident you will love this product, you can cancel at any time…”.
This Freakonomics podcast is informative, and as always, a entertaining listen.
See more about Ogilvy Change at http://www.ogilvychange.com/.