Learn how Standard Life, a pension company in the UK, increased its customer satisfaction (CSat) Score from +4.6 to +4.8 in the spring of 2020.
In this article, you’ll discover:
- An interesting step change that behavioral science is making at contact service centres;
- What nudges are effective in heavily regulated markets;
- How to better communicate complex ideas; and
- How to restructure call scripts to prevent customers from getting frustrated.
InsideBE is the largest behavioral economics and consumer psychology hub for marketers, sales people, and business professionals alike.
We want you to assess the following statement: companies often obsess over exceeding customer expectations, but the first thing they should do is to think long and hard about where they can reduce cognitive friction in the current experience.
Do you agree, disagree, or don’t have an opinion? At the end of this article, your response should be an unequivocal yes. If not, ask for your money back.
Attracting customers in a regulated & complex industry
Standard Life is a life and pensions company operating in the UK who have a mission to become the first choice for people's life savings.
Social proof is our tendency to be influenced by what others do, how they think and behave. Social proof works particularly well in situations of uncertainty.
But in such a heavily regulated market, the company couldn’t rely on driving customers in with incentives (such as a cashback incentive that's so popular in retail banking or “explicit nudges” that are heavily present in travel retail, like scarcity: “Only one ticket left at this price” and social proof: “45 people are looking at this room”).
Standard Life needed a different strategy to get more people interested in consolidating their pension pots with them. However, many find themselves confused by financial services – especially pensions – after all, it’s complex, intangible, and in the future.
So the goal was to provide customers with an experience that would demonstrate that the company could fulfill their needs at the present moment and in the future.
The goal was to provide customers with experience that would demonstrate that the company could fulfill their needs at the present moment and in the future by becoming customer-centric.
As a result, for those customers who’ve been job-hopping and have had several pension pots from various employers (each at a different pension company), the company wanted them to bring their pots together and consolidate them with Standard Life. In order to achieve this, the company needed to reorientate itself and become more customer-centric.
“They needed to learn how to speak to its customers,” says Jez Groom, founder of Cowry Consulting, the UK’s leading Behavioural Science consultancy, which Standard Life hired to help them get customers engaged with their pension plans.
Jez argues that navigating pensions often isn’t any more difficult than other financial decisions we make, such as taking out a mortgage or setting up a life insurance policy. But the problem is that the traditional pension companies are not used to dealing directly with real people! Historically, they’ve primarily dealt with a different audience: financial advisors or employee benefits consultants.
“The current communication is delivered to the B2B audience rather than to an end customer, and that has to change,” he says.
This was crucial for two reasons.
- Passive engagement with pensions (such as auto enrollment and smart savings) was no longer enough, especially for people working in the commercial segment where job hopping is more frequent than in the state sector or academia.
- People with smaller pension pots didn’t want to pay for advice; they’d go directly to the pension provider and ask for advice. Standard Life wanted to help these customers understand and engage with their pensions to achieve their ideal retirement.
Identifying pain points
Cowry conducted a behavioral audit to identify the psychological ‘friction points’ in customer conversations. The “Friction Audit,” as they call it, is crucial because it shines a light on the key areas that will make the biggest impact for customers when changed.
Cowry’s team learned about customer needs and grievances from various sources. They looked at the voice of the Customer Program, a survey sent out after every customer interaction, be it phone or digital; analyzed drop-off points in digital channels; and listened in on the calls to hone in on specific demands from customers and figure out whether or not they were satisfied.
They discovered that conversations about pensions can be confusing and fraught and result in a less-than-ideal experience for customers and colleagues alike.
So what was the first thing they needed to fix? The way complex things were (un)explained in the company's emails and phone calls, of course.
Simplifying complex ideas
Whilst helpful in some ways, the industry rules and regulations designed to protect customers are, at the same time, making them worse off, as too often they result in lengthy and confusing calls and emails.
Financial advisors further exacerbate the problem too. Many suffer from the curse of knowledge (not knowing what the customers don’t know) and speak to customers as if they were both on the same page. Customers struggle to admit that they’re not experts while advisors fail to explain complex information in a simple way, which leaves the interactions both arduous and time-consuming and both sides with a negative experience.
So even though the content of the calls was heavily regulated, Standard Life knew it needed to find a way to make it easier. They’ve come to understand that more information doesn’t necessarily lead to better outcomes. Especially in the financial market where the risk of ‘information overload’ is particularly high.
Customers struggle to admit that they’re not experts while advisors fail to explain complex information in a simple way, which leaves both sides with a negative experience.
Customers are often bombarded with information, leading them to be cognitively overloaded and unsure of what to do next. They often don’t understand their different options, as more information makes it harder for them to make the best decision or even any decision at all!
As many customers experienced a sudden drop in their pension savings during the COVID-19 crisis, it was even more important Standard Life communicated in a clear and reassuring way. Standard Life aimed to help customers and walk them through the short-term market changes so that they would be able to make good long-term decisions for their finances.
With a background of essential regulation guidelines, agents were empowered to highlight the different options that customers could take without explicitly advising on what option to take. The key outcome and objective of the conversation ensured that customers could understand their options, act upon them, and feel confident in the decisions they had made.
Jez Groom outlined the nature of the conversations that Cowry redesigned to advisors in the months of April, May, and June of 2020:
“We understand that at this moment the markets have started to decrease and you have seen the value of your equity funds decrease, but historically cash-like funds offer less opportunity for it to bounce back and give you an upside. So if you transferred it to cash now, you would be consolidating your losses into lower risk but also a lower chance of returning back to where they were.”
They modified the key message to help customers from all walks of life, and especially those in vulnerable circumstances, to understand this pivotal piece of information.
Jez points out that for people who were 65 and over and had less opportunity to bounce back, the guidance would be to speak to a financial advisor. Other customers whose funds still had time to recover were guided based on different levels of financial savviness.
Standard Life aimed to deliver this experience of confidence and reassurance across all its channels: i.e. via automated phone messages, e-mails, and website copy.
They even made an active effort to keep the phone lines free for its most vulnerable customers (seniors, disabled customers) and steered people away from picking up the phone as their primary option for resolving their queries. One way they did this was to add friction - making the process of contacting the center seemingly or objectively more difficult than resolving a query by using the company's digital service.
Standard Life chose to encourage more customers to use digital services with simple changes in language. Though it’s true that in the pension industry, one can’t use social norms to push forward a certain product, they can use it to push forward a type of service.
In this case, Standard Life focused on speaking about the benefits that many other customers receive from using their online platform to create momentum and drive usage.
The message which combined social proof with present bias was: “More and more customers get more up-to-date information now by looking through frequently asked questions or via a webchat. This leaves the lines free for people who are in potentially more vulnerable situations and NHS workers who are working long shifts during the day.”
The message which combined social proof with present bias was: “More and more customers get more up-to-date information now by looking through frequently asked questions or via a webchat.
3 simple changes in call scripts to avoid negative experiences
The next step Cowry’s experts took was to remove friction in the calls to create a fluent experience for customers.
First, they identified which parts of the calls weren’t working towards a better experience but were actually creating a negative one. (This is what they identified in an analysis of over 10,000 hours of call center recordings).
The goal was to make complex information simpler, help customers make good decisions, and ensure they didn’t get frustrated along the way.
Based on these findings, they designed a new ‘Conversation and Call Playbook’ for advisors who looked after the highest value customers. The goal was to make complex information simpler, help customers make good decisions, and ensure they didn’t get frustrated along the way.
This brings us to the most crucial part:
How people start the call and end the call has the power to create or prevent negative experiences. To learn why it’s better to work on removing the negatives rather than fixate on creating an outstanding experience, check out this article on how to understand what’s stopping customers and why it matters.
The changes are small and simple to implement, but with far-reaching positive effects on your business.
1.Start on the right foot
Groom says that the beginning of every call in any contact center in financial services starts with the wrong question: How can I help you?
Why is this bad?
Groom says that the beginning of every call in any contact center in financial services starts with the wrong question: How can I help you?
Imagine your pension pot just dropped 30%, which means you’ve lost a third of your money. So you jump right on to explain the concerns you have about your UK and American funds and the different options you’re considering and seek out expert advice on the pros and cons of each potential solution. Then the agent says.
“Can I have your name, please?”
Our brains don’t like to go backwards, Jez says. And that’s what just happened. The rest of the conversation, as Groom points out, can be just as cumbersome. He walk us through what might ensue:
Yes. It’s Jez Groom
“So sorry, we don't have that in our system.”
Er, my bad, the official name is Mr. Jarred Groom.”
“Could I have your policy number?”
“Yeah, just wait a sec. It’s ---”
“And could I get your date of birth?”
Urgh. The agent feels nosier than your future father-in-law asking you what you do for a living and you reply with “Errr, I’m working on a couple of things here and there in the recording business.”
Then finally, the agent can access your file! She sums up what you’ve just told her, finishing each point with a question mark and you go: yeah, yeah that’s what I’ve just said, wondering why do I have to go through with all this pain? And then, to add insult to injury, the agent makes a mistake when playing back your query which makes you question her competence. At this point, you might go all Karen on them and ask to speak to a manager. Ouch!
This all happens because of the way the company choreographed the experience. The beginning of the call is faulty to its core and it frustrates people: the agent asked you how she could help, and you gave her all the information, then she took you back to go through your security and then went forward again.
She then played back what you’d just said but because she concentrated on getting the security right, she didn’t listen that well. It’s not really her fault; the whole process is not working for you and it's not working for her either.
So Cowry changed the beginning of the conversation by rearranging the order of steps and added an introduction that embedded an agent’s authority right from the beginning. This works because customers are susceptible to cues of authority and changing the name of the position can help.
Especially when we are uncertain what to do we are more likely to trust and follow the guidance of those who they perceive as authority in their field.
In this case, to boost authority, agents now introduced themselves by their name and a title that established them as experts.
Read the Cowry-redesigned script below and noticed two subtle changes; the first one is authority, the second one is moving the verification process right at the beginning of the call, which prevents the conversation from going backward and then forwards.
“Hi, my name’s Sandra. I’m a retirement consultant at the pensions expert team here at Standard Life. Can I start by taking your policy number please?”
“Yeah, just wait a sec. It’s ---”
Can I have your name, please?
Ok. And then finally (reassuring that it’s the last step), could I have your date of birth because then I will have full access to your file and I can help you (explaining the purpose of so many tasks reduces uncertainty and increases the perceived value of the service).
Ok Great. So what’s the nature of your query today?
Well, actually my V2 fund...
At this point, Sandra has access to Jez’s files and all that she’s concentrating on is listening to him and writing it down.
As Jez sums up: “You told me you’re a pension expert. You’ve controlled the beginning of the conversation and you’ve reassured me that you know what you’re doing.”
Giving authority bias at the beginning of the call and creating a process in which a customer doesn’t have to go backward but which, at the same time, enables agents to deal with security in a logical order for them so that the customer feels reassured that the agent on the line is competent is really important to avoid a negative experience.
As Jez sums up: “You told me you’re a pension expert. You’ve controlled the beginning of the conversation and you’ve reassured me that you know what you’re doing.” And all that happened at the beginning of the call when I’m forming first impressions on whether to trust you or not.
2. Manage expectations
Our brains don’t like ambiguity about how long the call is going to take and what is going to happen during it. “You can’t say it’s going to be 3 minutes and 32 seconds long exactly,” says Groom, “but what you can say to put the customer at ease is perhaps something like this:”
“Thank you very much for going through security.
In terms of the call today, it would be really helpful for me to understand your concerns about the value of your current pension pot and what I can do for you. Then we can look at the performance of your fund and understand why you’ve seen such variability in the value of your fund.
After that, we can work on a plan together which will allow you to make a more balanced decision about what actions you can take.
So these are the steps we are going to go through. Is that something you will be okay with doing?”
Reducing the ambiguity for the customer also works well when transferring calls to another colleague by giving an approximation of the wait time.
3. Finish on the positive side of things
Another crucial part is the end of the call, which shapes how we recall the experience. Why does recall matter? As Daniel Kahneman famously said, “We don’t choose between experiences, we choose between memories of experiences.”
The good news is how the customer’s memory of the experience can be shaped by the peak-end rule (recency effect). This is how you can use it to leave the customer on the positive side.
We don’t choose between experiences, we choose between memories of experiences.
Avoid ending with a question that prompts customers to say no. Jez points out that the usual end of the call sounds like this: “Now that we’ve dealt with your inquiry, is there anything else I can help you with today?” The customer says no. “Would you like to take part in our survey about the quality of service you received?” The customer says no, finishing with a double negative.
“You may have had a good call, but at the end, the customer has said no twice, which doesn’t make either party feel very good,” he says.
To flip it into a positive, try asking: “Have we covered everything you needed from us today?” To get a yes and then, Groom argues you might just find a customer saving yes to the survey question as well. You might just benefit from the Yes Ladder.
Agents reported that with their new call guides, they felt they were able to perform better in their roles. It has helped them to structure calls and take back control.
Standard Life implemented all these changes and measured the impact on customer success metrics. Over a series of weeks, they compared a group that was using their new playbooks with a control group and found significant uplifts in a number of metrics.
Customer satisfaction (CSat) increased from +4.6 to +4.8. The way the company resolves complaints has also improved, which increased the number of customers, who after having their complaints resolved, rated Standard Life as Good or Excellent. (80% compared to 67% in the control group).
Business leads jumped by 54.5%, meaning customers were more engaged with the products that a company provided than an online platform.
To wrap things up
Become more mindful and seek to communicate the complex nature of your product in an easy-to-understand way. The first step is to map out the main barriers and pain points in the current exchanges between your customer and agents, and on your webpage and live chat.
Then begin the remedy process. Avoid building the process in a way that frustrates your customers (ambiguity and going backward), structures your call to build authority instead of undermining it, and be mindful of finishing on a positive note.
A series of these small nudges within the customer experience can be used across channels (the app, webpage, phone calls, messaging online) and have a dramatic effect on how they engage. And you may just find that once you stop fixating on exceeding customers' expectations, the results you get might exceed your own.
- Do your own friction audit to identify key areas that would make the biggest impact for customers when fixed.
- Communicate the complex nature of your product in an easy-to-understand way. Iterate. Perhaps you won’t get it right the first time. Remember you don’t know what they don’t know. Ask unfamiliar prospects (friends, family) for feedback.
- Create the order of the interaction (call, chat) in which customers don’t have to go backwards. Enable your staff to deal with security in a logical order for them so that the customer feels reassured that the agent on the line is competent.
- Structure your interactions to build authority in the beginning and be mindful of finishing on the positive.