As technology changes, so do customer behaviors, and so must our business processes. (I use the term customer loosely here to represent the larger set of consumers, employees, citizens and other stakeholders that may be among your target audiences.)
When the majority of your customers have decided that digital is their preferred way to interact with your organization, the tipping point for digital transformation has been reached. At this point, there is a need to exploit your readily accessible data to better understand how your customers are behaving so you can continuously evaluate and improve your strategies, processes and communications.
Data on your customers’ past behavior can help you make accurate predictions about their future behavior, allowing you to not just anticipate, but influence, their behavior to drive profits, increase efficiency, improve service and better manage risk.
Go with the facts, not your gut
A common temptation is to try to project oneself into the customer’s shoes by asking questions like, “If I were to receive the communication I just designed, how would I react?” While this method may feel rational, the evidence is quite overwhelming that such approaches are highly prone to bias and error. The plain fact is we cannot safely rely upon our own personal instincts to predict how our customers are likely to respond to a marketing offer, a reminder, a warning or a particular situation.
So we need to look at what is actually happening in practice and understand what our customers are telling us from their true actions and behaviors. Here’s an excellent example of this point.
Traditional approaches to government debt collection have assumed that the more information debtors receive, the more likely they are to pay (if able), and that clear explanations should be sufficient to prompt debtors to behave rationally. In fact, however, the unconscious system has been found to be much more influential than previously thought. As a result, when it comes to something as highly emotional as parting with one’s own money, it can no longer be assumed that supplying facts and rational arguments alone will persuade people to resolve their liabilities. Instead, collection strategies must be designed much more carefully to reflect how people respond based on real-life rather than theory.
I invite you to read our white paper on using behavioral science in government debt collection to improve outcomes, increase revenue collected and reduce non-compliance for more information.
While executive intuition and instinct will continue to have their place in corporate and operational decision-making, we believe organizations large and small can deliver bottom-line benefits by tapping the enormous value contained in their own customer data, and enabling the facts and evidence to have a much bigger say in their decision-making.