How to Increase Customer Loyalty With Tiny Behavioral Nudges

How to Increase Customer Loyalty With Tiny Behavioral Nudges

Influencing customer behavior is not a dark art. It’s a great way to love your customers, and here’s why.

Influencing customer behavior is not a dark art. It’s a great way to love your customers, and here’s why.

The first time I saw the chart below – which comes from psychologist Dan Ariely – I was shocked.

The chart compares organ donation opt-in rates from various European countries.

How can they be so different?

How can 99.98% of Austrians opt-in to become organ donors, while only 4.25% of Danes do the same?

Do people in the “blue” countries care more about organ donation than those in the “yellow” ones?

Is the cultural attitude toward donation different?

Are there more public awareness campaigns?

As Ariely explains, here’s the actual reason for the massive difference:

It turns out that it is the design of the form at the DMV.

In countries where the form is set as “opt-in” (check this box if you want to participate in the organ donation program) people do not check the box and as a consequence they do not become a part of the program.

In countries where the form is set as “opt-out” (check this box if you don’t want to participate in the organ donation program) people also do not check the box and are automatically enrolled in the program.

In both cases large proportions of people simply adopt the default option.

Ariely reveals a simple, but amazingly powerful truth about human behavior: in any decision, we tend to default to the easiest option. And if the easiest option is to not make a decision at all, we’re happy to do that.

As Richard Thaler and Cass Sunstein’s book, Nudge, explains, even the tiniest nudges – in the organ donation example, simply switching the default – can eliminate the need to make a decision and greatly influence our behavior.

For those of us in customer service, that’s a very valuable insight to understand.

How Nudges Can Help Us Deliver a Better Customer Experience

Your customers make a ton of decisions.

Everything from whether or not to buy your product, to which plan/options they want, to deciding on their account settings, renewing their subscription, and so on…

If we know that, as humans, they’ll generally go with the option that requires the least amount of thinking, we can do two important things:

  1. Influence customer choice: we can nudge our customers to make decisions that will help them be more successful (and thus, happier that they chose to do business with us)
  2. Reduce customer effort: we can reduce the effort our customers have to exert, which, as a Harvard Business School study found, is the single most important factor in creating customer loyalty.

Where to Incorporate Better Nudges In Your Customer Experience

So, if we know that offering strategic nudges is useful, how can we apply that principle to customer service?

Successful companies do this well across many of the decisions their customers have to make, and below are five examples to get you started.

Your “Contact Us” Form

When you go through the “Contact Us” flow on Amazon, they’ll nudge you toward the contact method that has the shortest wait at any given time:

While this dynamic approach isn’t necessary for smaller businesses, we can still apply the underlying concept: rather than simply listing all of the ways to contact you (phone, email, social media) on your website, highlight the one where you know you’ll see it – and be able to respond – fastest.

Your Onboarding Flow

Successful onboarding is, at its core, simply a series of strategic nudges to get your customer to interact with your product.

Rather than dumping new users directly into the app and forcing us* *to decide what to do, Slack guides you through each step that the company thinks you should take, in the order that they think you should take them:

This leaves fewer decisions for the user to make, while helping them get more value out of the product.

Account Settings

When an Upwork user creates a new job listing, they have the option to make the listing public (discoverable by search engines) or private (visible to Upwork users only).

But rather than offer all of the privacy options at once, Upwork defaults the setting to public. If the user does nothing (that is, if they make no decision), their listing will get maximum exposure…and so will Upwork.

Profile Completeness

When you create a Google Plus profile, you see a meter that moves when you take different steps to complete your profile.

By gamifying this process, Google nudges us (and taps into our need to progress towards a goal, called the Endowment Effect) to interact more deeply with the product.

Your Pricing Page

If you have multiple pricing tiers, and you know that one of those tiers offers the best value for most customers, then you want more customers to choose that plan, right?

By highlighting their “Best Value” plan, Unbounce delivers a not-so-subtle nudge that helps make the choice easier for new customers.

Nudges Help Both You and Your Customers Win

Notice how in each of the examples above, nudges benefit both the customer and the business.

If your business helps your customers succeed, then in it’s in both of your best interests to help the customer make better decisions, and behavioral nudges are one of the easiest and most powerful ways to do that.

What other nudges have worked for you? Where have you noticed nudges in the products that you use?

Let me know in the comments, and thanks for reading!

Len Markidan avatar
Len Markidan

Len used to head up marketing at Groove. Though he has now moved on to other adventures, he still likes popping in and saying hi every now and then.

Read all of Len's articles

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