Customer Behavior and CRM Advocate

Posted: November 3, 2011 in CRM, Economics
Tags: , ,

Gary Lemke over at CRM Advocate  does some nice work.  Every day he asks a thought provoking question related to CRM and asks readers for their “take” on the issue.  Over the years he’s exposed me to a lot of good thinking and I encourage you to take a look at his blog.

A few days ago the subject was Daniel Kahneman, a psychologist who won a Nobel prize — in economics.  Kahneman and his colleague Amos Tversky laid the foundation for behavioral economics and challenged us with the idea that, while economics studies the rational behavior of individuals in the marketplace, we are not always very rational.  That means at least some of the time we are doing logical things for emotional reasons out there in the good old market.  Without fingering any single behavior this idea nonetheless explains a lot.

So with Kahenman as the basis, Lemke asks how often we do things in the marketplace that are emotional vs. rational.  He says,

“Now, let’s use to 80/20 rule and suggest that most customers in search of service (for example, calling the call center) lead with emotion. And let’s use the same 80/20 rule to suggest that business objectives and business processes drive primarily rational behaviors understanding that individual employees still possess emotional attributes.

The startling conclusion (and graphic) is that only about 16% of the time are both sides dealing in a rational/rational manner.  The big winner at 64% is “rationally dealing with the emotional” i.e. rational vendor dealing with emotional customer.

Yikes!  This doesn’t make any attempt to grade emotion from under control to crazy but it’s still valuable.

I don’t know if the 80/20 rule obtains here, but as I told Gary, it sure feels right.  If that assumption is even close (and I bet it is) then it is the best explanation I’ve seen for a focus on the customer experience.  Forget the rules, the metrics for call handling time and all the rest.  More likely than not you are dealing with an emotionally driven customer who needs some TLC.  Dispensing TLC all day is a hard job and perhaps this is one of the silent reasons driving people to social networks to solve problems.  What better place to find someone who empathizes with you?

So, what did you think?

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