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PSYCHOLOGY USED IN AUTOMATED CUSTOMER SERVICE

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Humans are emotional beings; they can be grumpy, lovely, or sometimes a mix of both. It is for this reason that people in customer-facing positions strive to master the art of human psychology. The end goal is to evoke the right customer emotion and influence positive decision making.

With automated customer service, communication is between a bot and a person. But that doesn’t eliminate the emotional aspect that influences decisions. Therefore, you have to optimize your help center system to humanize the conversations as best as possible. So, how do you go about that?

In this article, we enlighten you about the psychology used in automated customer service. We share the psychological tactics that you can apply in your robotic support system to increase customer satisfaction. We also discuss the same psychological triggers that course building platforms use to influence positive experiences, and how you can leverage them.

Psychological tactics you can implement in automated customer service

Adopt a pain-numbing scheme

Pain is powerful emotional feedback that affects human decisions, positive and negative alike. Therefore, you have to design your automated support system to include pain reduction points. Some of the things that trigger pain in consumers include:

  • Missing the items that they’re searching for in the catalog
  • A hard time accessing essential shopping tools like carts
  • Difficulty comparing prices

Optimize your automated customer service software to provide quick links to common shopping tools. Also, feed it with keywords that shoppers possibly enter while searching for various items to recognize shopping difficulty. Further, add features like save-for-later so that consumers can access unresolved issues with ease in the future.

Promote instant gratification

In psychology, there’s a popular theory that discusses the pleasure principle in human behavior. It observes that we are driven by a force of instant gratification when dealing with needs, urges, and wants. So, how is this relevant in automated customer service?

First, customers love working with systems or people who respond to queries in the shortest possible time. As such, you need to design your support system to resolve issues as instantly as they come. This way, you can easily keep your customers on the site since it eliminates the need to seek help elsewhere.

Secondly, when resolving issues, most people appreciate being in control than feeling as if they need you during those moments. Your automated system should encourage self-service when attending to customers. Design it to direct your visitors to FAQ pages and resources that contain relevant info.

Apply social proof

Consumers feel more confident when buying solutions that worked for other people. In psychology, this inclination is referred to as social proof and is useful in building a sense of trust. Luckily, you can apply it to your automated customer service system to influence positive customer decisions.

For example, a buyer wants to find out more info about an item they’re hoping to purchase. You can design the support system to direct them to both the description and the customer testimonials pages. The idea is to influence purchase by proving that other consumers like the item as well.

Additionally, you can add common questions that your customers ask in the FAQ page and your solutions. Personalizing the queries helps visitors realize that you’ve assisted other consumers before. Eventually, this builds a sense of trust in your capability to meet user needs.

Leverage the Halo Effect

The Halo Effect is a cognitive bias where your feelings about something influence your judgment of its other aspects. The existence of this bias affects how you view things and make your decisions on a quick call.

In customer service, you can leverage the Halo Effect by creating positive experiences. Have an interface in your support system that’s personal to the users or emotionally engages them. Use words, colors, or images that form positive impressions at first glance. Here, you’ll instantly move the consumers from the “getting to know you” phase to the biased “this feels homely thus trustworthy” phase.

For example, if you’re in a fashion niche, rename your customer service portal to something like” “Ask a Stylist”. Doing this creates a positive assumption in the mind of your visitors that the service system/personnel has the necessary expertise. Combining this with the right dialect further builds the homely feeling.

Use the reciprocity principle

The reciprocity principle is a powerful human influence tool, as demonstrated in a 1984 book by Robert Cialdini known as Influence: The Psychology of Persuasion. The author observed that people often feel indebted to repay kind gestures. Today, marketers using psychology are still applying his ideas to boost customer conversions.

So, how can you use the reciprocity principle in customer service?

Optimize your automated support system to offer as much free expertise, time, and attention as possible. When customers receive comprehensive responses, they’re naturally obliged to purchase what you’re selling.

Your free acts of service can be subtle or announced. For example, if your support system successfully resolves an issue, you can encourage the visitor to take any action that counts as a conversion. Alternately, you can let them decide on their own the next course of action to trigger reciprocity.

 

Psychological triggers you can apply to your automated customer service

Self-love

People naturally exhibit the trait of self-love during interactions. They tend to put their desires and ambitions first, something that creates a yearning for others to show interest. If they get the attention they seek, it makes them feel important, unique, relevant.

In automated customer service, it’s possible to leverage self-love and encourage positive decisions. For example, you can design the system to call visitors by their name to increase a sense of recognition and importance. Additionally, ask questions that focus on learning more about them.

Empathy

Consumers build trust in brands that appear to understand their feelings. It’s easier to show empathy in automated customer service systems than other communication methods, like voice calls.

For example, you can set the live chat to allow you to review messages sent to visitors when sensitive subjects are in discussion.

Path of least resistance

Human beings prefer methods, actions, and solutions that offer the most convenience. You can use this psychological finding to optimize your web interface in a way that encourages visitors to chat with you.

Create an automated greeting that invites the visitor to a conversation. For example, “Hi, can I help you find the right item?”

Conclusion

Not every psychological trigger or tactic that we’ve discussed will work for you. Each brand has customers with varying personalities and temperaments. Nonetheless, the above will offer a great starting point for people who just implemented the automated customer service system.

Finance

WHY THE NORDICS WILL CONTINUE TO LEAD THE WAY IN DIGITAL PAYMENTS

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By

Kriya Patel, CEO, Transact Payments

 

While the recent introduction of PSD2 — the second iteration of the EU’s Payment Services Directive — has undoubtedly had an effect on the entire continent of Europe, some regions have been in a better place to take advantage of it than others. Largely thanks to a historical willingness to foster and embrace innovation, the Nordic nations were already something of a global leader in the electronic payments space even before PSD2. Now, it looks as if the Nordics is on course to be the first region in the world to fully realise digital transformation in payments.

With a combined population of 21.39 million, the Nordic markets of Sweden, Denmark and Norway have the highest penetration of electronic transactions anywhere in the world. It’s estimated that cash is only used in 3% of transactions in Norway, with this number only slightly higher in Sweden. Given this context, it’s no surprise that there are nearly twice as many payment cards as there are people, at 41.86 million cards. These cards are used for around 7.8 billion transactions annually — worth more than £205 billion — made at just under 600,000 point of sale (POS) locations and online.

You could be forgiven for thinking that given the advanced state of play in the payments market that there would be few opportunities left for incumbents or new entrants to take advantage of. However, for those who are willing to innovate and diversify there could be market share up for grabs. And there are also plenty of things that payments players in other regions can learn from this market. In this article, we will examine what these opportunities and lessons are.

 

Highly developed market

E-commerce accounts for a very large proportion of overall electronic transactions in the Nordics at between 19 and 22%. It’s a segment that is continuing to grow rapidly, even though cards remain the preferred way to pay online and in person.

In fact, cards account for a huge 85% of all in-person transactions in the Nordics, with debit cards used for two-thirds of all purchases in Denmark, for example. In the background, this is enabled by a highly functional consumer-permissioned digital identification system known as BankID that makes Know Your Customer (KYC) compliance for e-commerce much more straightforward for vendors and customers. This scheme, which was first envisioned more than 20 years ago, is one of the key reasons why this region has made such strong advances in digital payments.

Since 2015, all three Nordic markets have embraced digital wallet solutions – Norway’s Vipps, Sweden’s Swish and Denmark’s Bankort. In the case of Denmark, their digital wallet grew from the Bankort debit card solution shared by major Danish banks. Across all three markets, these home-grown wallets have seen strong growth, with Swish reporting the fastest usage growth in the over-45 segment. These domestic wallets are currently looking to grow their functionality, with parking and bill payments being added on top of peer-to-peer (P2P) money transfers and a debit function.

 

Digital wallets to expand functionality

As digital wallets rise and cards continue to be used for a very wide range of purchases, the Nordic markets continue to seek opportunities to reduce cash use for everyday, low-value purchases such as parking and street vendors. This will create room for mPOS (mobile Point Of Sale) and soft POS systems providers, as well multi-function card products. Loyalty is also likely to be another area for growth, with players keen to ensure that they can retain existing customers and attract new ones from their competitors.

One of the most interesting areas in the Nordic region’s payments landscape is how these digital wallet solutions can expand internationally. While digital wallets are growing rapidly in the domestic space, the capacity of these wallets to be used outside the Nordic region is still very limited. Creating international links for Nordic-only solutions will certainly be an area of growth in the coming years, so providers looking to partner with banks or wallet providers should find a receptive audience in these markets.

As with other European markets such as Spain and Germany, we’re also seeing the rise of specialist banks built to meet the needs of smaller companies in the Nordics. Banks such as Norway’s Aprila are expanding rapidly by taking advantage of PSD2’s Open Banking mandate to access SME credit data and deliver innovative payment products and lending solutions. Corporate credit and debit card products will be a major growth area in the near future as SMEs will finally get the attention they deserve.

There’s a great deal that other regions can learn from the Nordics. While the combined population of the three countries adds up to only around one-quarter of Germany, for example, the relatively low population density has proved a fertile ground for digital payments. It will be interesting to see how some of the more innovative services we see in this region can make international links, or how players in other regions try to replicate them.

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Banking

THE GROWTH OF DIGITAL BANKING: WHY COLLABORATING WITH FINTECHS IS CRUCIAL TO ADAPT TO CUSTOMER DEMANDS IN LIGHT OF THE PANDEMIC

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The growing customer demand for a seamless digital banking experience looks set to transform how the entire banking industry operates. Traditional banks have been left playing catch up with the emergence of new fintech players and challenger banks. The demand for slick digitally finance solutions is led by the digital native generations, the millennials and Gen Z. However, the coronavirus pandemic accelerated the uptake of online shopping and remote working for whole swathes of the population. Even the older generations have been left wondering why accessing banking services online remains so cumbersome.

Consumers’ growing desire to access financial services through digital channels has already led to a surge in various new banking technologies which are reconceptualising the banking industry. Consumers have rapidly moved to adopt payment solutions such as those offered by apps like Revolut.

Manoj Mistry

Retail banks continue to launch platforms in the Banking as a Service (BaaS) space, in an effort to remain competitive. An example of this in the UK is how NeoBank (Starling) used to only offer business to consumer (B2C) retail banking services. However, once it launched its BaaS platform, Starling was able to rapidly diversify to include consumer services.

New technologies like blockchain and artificial intelligence (AI) continue to evolve, and look set to have an enormous impact on banking over the next three to five years. The type of cryptocurrencies that we have seen to date look set to be far more tightly regulated, given significant governmental concerns about their potential for misuse in cybercrime and money laundering.

In the blockchain space, the transformative development which will accelerate the rise of digital finance is the advent of central bank-backed digital currencies. The US Treasury has described the creation of a digital dollar as a high priority project. China is already trialling its digital Yuan. Meanwhile, the ECB is actively pursuing its plans to launch a digital Euro. The launch of stable, highly secure digital currencies, underpinned by major central banks, looks set to ensure that digital finance will permeate every area of our lives in the not too distant future.

How we use digital finance is also set to change radically. We are used to seeing new technology emerge from Silicon Valley. However, an analysis by KPMG Australia suggests that a new breed of apps which prefigures the future of digital finance has already emerged in the East. The report notes that “super apps” are “already encroaching on traditional financial services territory”.

Super apps are defined as apps which “essentially serve as a single portal to a wide range of virtual products and services. The most sophisticated apps – like WeChat and Alipay in China – bundle together online messaging (similar to WhatsApp), social media (similar to Facebook), marketplaces (like eBay) and services (like Uber). One app, one sign-in, one user experience – for virtually any product or service a customer may want or need.

“Due in large part to their versatility, super apps have quickly become ingrained into users’ daily lives. It is not unusual for a WeChat user in China to set up a date with a friend via instant messaging, make dinner reservations, book movie tickets, order a taxi and pay for every transaction along the way, all using one single app.”

We are already beginning to see trends in this direction in the Western world, with Facebook launching a marketplace and even a dating service within its social network. Facebook also attempted to launch its own digital currency, Libra, but this move stalled when it ran into significant governmental opposition. However, Facebook hasn’t given up, and it is determinedly pursuing the launch of a revamped stablecoin, Diem, which has been redesigned to address regulatory concerns.

A group of Citi analysts recently wrote an interesting research paper, which predicts that “the story of digital money in the 2020s will be the growth of tokenised money”. Noting that both Big Tech and Central Banks “are building new payment formats and rails,” they say that “while stablecoins such as Diem await regulatory approval, they could benefit from the huge network effects of their Big Tech sponsors. In fact, Diem could be an effective tokenised payment format inside the Facebook universe.” The paper predicts that “Stablecoins, such as Diem, could benefit from the huge network effects of their Big Tech sponsors”. With 3.3 billion monthly users, Facebook certainly has remarkable global reach.

The idea of an integrated tech platform which enables people to interact and purchase goods and services – including financial services – is now being pursued by many major players.

Amazon has long been rumoured to be planning to launch its own bank. Yet, research by CB Insights concludes that, “from payments and lending to insurance and checking accounts, Amazon is attacking financial services from every angle without even applying to be a conventional bank.” This is perhaps not surprising. After all, tech companies rarely replicate existing models. They usually find disruptive new ways to achieve the outcomes that consumers want. Even the messaging service, WhatsApp, has recently moved into financial services with the launch of WhatsApp Pay.

As money becomes digitised and tokenised and ever more areas of our lives move online, the distinction between an online marketplace, a social network and a financial services provider will continue to blur. How traditional financial services companies react to these developments remains to be seen. Some may partner with tech companies in creating new services. For example, Visa and Mastercard were involved with Facebook’s Libra stablecoin project. Visa also responded to the popularity of peer to peer payment services such as Revolut by launching Visa Direct, which enables users to make payments directly to another account in 30 minutes. Most major banks now support Apple Pay, which enables users to authorise payment by scanning their face or thumb.

Banks can also collaborate with tech companies in terms of data sharing, in order to better understand what their customers want. A company like Amazon knows what books people like, what music they listen to and what they purchase. By combining such data with wider financial data, remarkably predictive Big Data models could be created. Some banks might increasingly pursue opportunities to monetise data, while others might make privacy their unique selling point.

The banking sector fundamentally deals with money. Yet, the very nature of money is set to change, as it becomes digitised. Banks are no longer merely competing with each other, but they are both competing and collaborating with tech companies and social networks. Looking ahead, the only certainty we have is that we are in for a period of remarkable change.

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