After a fintech client spent six months trying to reach consumers, behavior design consultancy Behavior Delta wrote an SMS that had 30% of customers calling back within three minutes. Here’s how they achieved this remarkable turnaround.
In this article, you’ll discover how:
- Personal language and emojis can be used to develop relationships with customers, even in B2B settings;
- Snaptesting helps interventions to get up and running without the need for large-scale research; and
- Finding the right communication channel is key to boosting interaction.
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As a behavior design firm, Behavior Delta is interested in making it easier for people to do what they already want to do. They identify consumer motivations, remove the hurdles that prevent them from taking action, and help them to feel more successful throughout the customer journey.
A fast-growing fintech client which provides loans to SMB owners
In 2020, founder David Ngo and his Behavior Delta team were hired by a B2B fintech client to improve the take-up of new loans and increase collections on loans with missed payments.
Missed payments and non-responsive customers are issues for any financial organization, but the client’s problem had become exacerbated by the COVID pandemic: many of these customers had not responded to any communications for over six months.
Behavior Delta team was hired by a B2B fintech client to increase collections on loans with missed payments from customer who had not responded to any communication over six months.
It was clear that their existing communication channels - outbound phone and email - weren’t working. Even after using different subject lines, tone of voice, and calling at different times of the day, responses were not increasing.
David and his team were asked to help break this radio silence by testing new outbound channels that showed empathy for customers’ situations and more accurately matched their communication preferences.
Behavior Design involves trusting the customers’ intentions
As founder of Behavior Delta, David Ngo believes in beginning with the principle that the customer has good intentions: “We’re not in the business of manipulation or coercion. We’re helping people to do what they already want to do - that's an important distinction.”
Behavior Delta looks for interference in the way that users interact with a client - things that are stopping customers from following through on their intentions. “We want people to feel successful along their journey,” David says. “It’s about making it easier for them and giving them a path. It's not just giving praise, even though that's often part of the equation.”
Ngo’s behavior design approach is based on Fogg’s Maxims, a set of disarmingly simple behavioral principles formulated by Stanford behavior scientist and founder of this space, BJ Fogg, PhD:
- Fogg Maxim #1: Help people do what they already want to do.
- Fogg Maxim #2: Help people feel successful.
- Fogg Maxim #3: Simplicity changes behavior.
In this sense, behavior design is fanatical about identifying and targeting the motivations behind behavior. If a person’s aims and preferences can be accurately distilled, then all a marketing team needs to do is create a response that allows people to successfully follow through on those intentions.
“It sounds like a simple principle,” David admits, “but it means designing built-in motivation for the behavior, which is a distinction [from other approaches to behavior based on incentives].”
Making communications feel natural
Knowing that current communication channels weren’t working, and assuming that customers did genuinely want to return to a payment plan, Behavior Delta began to formulate plans for a new communications channel: SMS messaging.
They chose to test the effectiveness of SMS for several reasons. In the short term, it was a convenient option that could be deployed quickly, in comparison to alternatives such as a chatbot.
But they also saw SMS messaging as a way to implement the behavioral design principle of making it easier to do what comes naturally. “Some people do prefer email, and that's fine,” David says. “Others prefer phone calls. That's also fine. Some people prefer an email first, and then a phone call. So you get different sequences.”
By adding an SMS option, Behavior Delta created support for an increased number of communication options - not just text, email, or phone, but combinations of channels in different sequences that made interactions feel more authentic and convenient.
Testing small, then scaling up
Instead of waiting for the client to finish a lengthy enterprise contract and system-wide integration with Twilio, a large and complex SMS platform, Behavior Delta grabbed a burner phone and set about testing different versions of their message.
This highlights another principle of the behavior design approach - start small, go fast, and discover people’s natural responses. Instead of the large-scale, highly structured testing that exists in other areas of behavioral science, David and his team manually wrote a series of messages, gained the necessary approval from Compliance, and were able to generate insights from a small cohort of respondents. In the discipline of Behavior Design, they call it “Snaptesting.”
They ran one or two Snaptests every couple of weeks, reaching out to between ten and thirty users per iteration. Sometimes they used a fresh batch of people; other times they prompted the same group to see how responses would change.
When was the last time your bank used an emoji?
Testing told Behavior Delta that their message needed to show empathy, break out of the overly corporate tone used by many financial companies, and make responding a frictionless action. They settled on a message that began with the greeting “Hey” followed by the customer’s first name, and a wave emoji. While casual language and emojis might be mainstream in B2C, David felt it was a novel approach for the B2B space, especially from a fintech company looking to collect on missed payments: “It’s a delightful prompt that's unexpected. It’s out of the norm and might even be considered risky.”
While casual language and emojis might be mainstream in B2C, David felt it was a novel approach for the B2B space. “It’s a delightful prompt that's unexpected. It’s out of the norm and might even be considered risky.”
The team crafted the message’s first two lines to deliver compassion, while clearly identifying the client. Because they were using a burner phone, the caller ID showed as unknown, so it was critical that as much information as possible was conveyed in the message’s preview screen.
From there, the message continued to speak from an empathetic and compassionate point of view, taking into account the context of the COVID pandemic. Behavior Delta imagined that people were not only struggling to make their payments, but that they might be embarrassed to get a phone call and have to admit to not being able to pay.
Behavior Delta ended their message with an equally friendly call to action, consisting of three options developed with the client to return customers to a payment pathway. Choice overload can be a risk when offering users multiple ways to proceed. However, this context involved customers who weren’t motivated by pre-existing options, so a set of flexible next steps helped create an attentive tone.
30% of business owners called within three minutes of receiving the SMS
Because they were dealing with a cohort of people who hadn’t responded to communications for six months, Behavior Delta’s aspirations for their message were relatively humble. “These were customers who the client had effectively written off as debts and liabilities - as people who were never going to pay back their loans,” David says. Any engagement at all would have been considered a success.
But, within three minutes of sending the message, 30% of business owners had responded to the prompt and called the client back. This was a major win and supported Behavior Delta’s original hypothesis that the customers did want to talk about returning to payment plans, and simply weren’t being provided with a communications channel that matched their preferences.
Increasing the predictability of customer behavior
The extreme shift in consumer behavior produced by the message - from complete silence to almost immediate responses - gave Behavior Delta’s client the additional benefit of being able to plan around more predictable consumer interactions.
They knew that if they sent 100 messages, around thirty customers were likely to call back within a few minutes. This meant that more efficient strategies could be put in place to better serve the clientele. They developed a new in-bound call protocol, calling it “the power hour” and setting aside a certain number of phone lines and employees to take calls.
Not only was this a huge efficiency gain for the client, but it allowed them to provide a higher quality of customer service, with less need to place high-value calls on hold. It meant no longer needing to rely on the luck of outbound calls or email.
Starting with low-risk cohorts (if necessary)
Something that David points out about this case study is the often-overlooked value of working with low-risk cohorts. By focusing on a group of people who had ghosted the client for many months, Behavior Delta could easily gain license to be creative and quickly run Snaptests to increase the rate of learning for the client - an approach that may not have been approved for VIP customers.
David and his team knew that there was a chance to experiment and quickly build momentum. While the focus on a low-risk cohort was partly driven by the project’s tech limitations, “when it came to finding opportunities to make a substantial impact,” he remarks, “they were an ideal demographic.”
- Even in B2B and corporate contexts, don’t underestimate the value of an empathetic tone. Showing your human side with an emoji or joke can help initiate conversations, while demonstrating a genuine understanding for people’s issues can create lasting connections with customers.
- What appears as an issue with customer motivation may actually be a problem with your communication channels. Invest time in understanding how your customers prefer to interact with you (platform, time of day, length of conversation, etc.) then create channels that suit those preferences.
- Large-scale research is great for fully validating insights, and expensive software is useful for implementing solutions on a grand scale. But don’t let logistics get in the way of discovering and testing interventions. Sometimes all you need is a burner phone and a list of customers.