Customer perception is a funny thing – I was reading a New York Times article that found consumers perceived a discount from US$3.00 to $2.33 as bigger than a discount from $3.00 to $2.22. Sounds crazy, right? $2.22 is a lower price than $2.33, but when consumers look at numbers they connect certain types of sounds (like “o”) with more and other sounds (like “ee”) with less.
Interesting theoretical information, but what does it mean for customer service? I am starting to think these findings, along with books like the recently published “Priceless”, mean we can influence (or even change) customer expectations – not just on prices, but also in service transactions, especially when we have nothing but bad news for the customer.
The term used to describe this influence is often called ‘anchoring’. When anchoring, before you put your real/preferred option on the table for the customer, you start with a worse option.
There are plenty of examples of this in sales and marketing (for example, the US$279 Williams-Sonoma breadmaker didn’t sell until they introduced the $450 model), but we’ve been throwing around a few service examples in recent team meetings. My favorite comes from my colleague, Rick DeLisi. Take a look at the difference between these two conversations:
Situation: Jill’s 3:00pm flight to Cleveland has been cancelled, so she calls to re-book her flight.
Conversation 1 (no anchoring)
Frontline Rep: The best we can do is book you on the next flight out in six hours. Should I re-book you on our 9:05pm flight?
Jill: Six hours? Are you kidding me – I’m already at the airport and you’re telling me I have to wait here another six hours?!? Plus, I’ve got an 8:00am meeting tomorrow – I won’t get in until midnight.”
Conversation 2 (with anchoring)
Frontline Rep: We can re-book you on a flight to Cleveland and we have a flight leaving tomorrow morning at 7:20am.
Jill: Tomorrow? I have to get there tonight!
Rep: Let me see what I can do. I see we have a flight leaving today at 9:05pm, but it seems pretty full. I tell you what – can you hold on for a minute and let me see if I can something here?
Jill: (getting more frustrated she might have to take the flight tomorrow): Sure.
Rep: Jill, are you still there? Excellent – I’ve got some great news. I was able to get approval to put you on the 9:05pm flight, so you are all set. How does that sound?
Jill: Thanks for pulling some strings for me! I appreciate it.
Can you see the difference between these two conversations?
In both, the best option for Jill was the 9:05pm flight. But in Conversation 1, Jill leaves the call frustrated. In Conversation 2, Jill believes the rep advocated for her and took on effort for Jill. In Conversation 2, Jill’s experience is markedly better – all because the company managed her perception of the experience.
What do you think – is this a new way forward to manage customer expectations and reduce the perception of customer effort or is it an overly manipulative way to handle customers? Can you think of ways to anchor customer expectations for your customers?
CCC members, check out our latest thoughts on customer expectations anchoring and ways to improve the customer experience by reducing customer effort.
Related posts:
on February 25, 2010
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The example of anchoring in this article is unethical. However, I think it is possible to get a positive experience with a perfectly ethical example. How about offering both the morning flight and evening flight at the same time? Then the customer can see the relative benefit of the evening flight, and the company did not have to lie to the customer.
on February 25, 2010
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I agree with Amy – this smacks of customer manipulation and is not a strategy we would ethically train. That said, offering options, empowering the customer to choose her best option and affirming that she made a good choice is likely to result in a positive experience all around.
on February 26, 2010
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‘Can you think of ways to anchor customer expectations for your customers?’
Without deceiving them? I agree that perception is deceptive already…but to manipulate it more? The ethics line goes further south.
on March 1, 2010
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Thanks for all the thoughtful comments.
I’d agree there are a range of ways to anchor customer expectations – from gently rephrasing the customer’s options (for example, explaining to a customer why a password reset is in their best security interests) to more extreme forms of conversation handling.
The example in this blog post is certainly on the more extreme end, mainly to serve as a clear example of expectations anchoring. A less extreme, but similarly effective, form of anchoring could involve positive (as opposed to negative) language.
For example, in the old world a frontline rep would say to a customer who wanted their fee waived, “We can’t waive that fee for you – it’s against our policy.” In the new world of customer expectations anchoring, the rep might say instead, “What we can do is spread your fee across the next three billing cycles, interest-free. And we can help you set up automatic alerts so you won’t have to pay this fee again.” Or of instead, “The store closes in 1 hour.” how about, “The store stays open until 9pm.” The differences here are more subtle – but it’s the careful positive phrasing of the situation that can greatly influence the customer’s perception of their experience.
My larger point here is to ask – what can we do when our proverbial backs are up against the wall and all of our available options are going to be unacceptable for the customer? Do we necessarily take a hit to the customer experience – or can we do something about it that can be a win-win situation for both the customer and the company? Customer expectations anchoring has shown some early promise and even success among some companies I’ve talked to, but it’s clear to me that it’s a hard concept to get right – and has serious consequences if we get it wrong.
on March 2, 2010
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I am excited to see the level of reaction here (this is a VERY interesting discussion!)–and I agree, presented this nakedly, this does feel manipulative.
But lemme ask you this–when an auto dealership puts its’ flashiest and most expensive car in the front window…when a hotel puts a photo of its presidential suite in a brochure…when a restaurant server temptingly offers you “today’s special”–do we recoil in ethical shock?
The point of “anchoring” isn’t nearly as devious as any of these obvious (but well-accepted) upsell techiques. The key to competitive success in customer service to find ways to present the information that leads to “resolution” in a way that allows customers to emerge from the transaction with a clear sense of victory and accomplishment–forged in partnership with the front-line rep, who has advocated on their behalf.
How can we reach that goal?
on August 19, 2010
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[...] I know some of you are thinking we shouldn’t manipulate customers like this, particularly when it comes to anchoring. And there is certainly a line where such techniques cross a moral threshold. [Lara created some strong reactions with her blog post on this topic] [...]
on December 19, 2010
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[...] for instance anchoring, a practice of strategically placing an option within a range of carefully selected choices. When [...]
on September 3, 2011
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To say that a hotel putting their best suite on the front of a brochure is more devious than pretending that a bad choice is the only one and then switching out a less objectionable alternative in an effort to save the day is over the edge. Rick, I’d challenge you to consider your own reaction if you found out that someone had manipulated you in such a way. The brochure and offer of today’s special are up front and honest. The other examples are deceptive, period.
on September 6, 2011
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Peter–Thanks for your thought, and I don’t think we’re disagreeing here. Yes “anchoring” can be dangerous since it can cross over the line into being clearly deceptive, and is nothing more than just a “trick” to manipulate a customer. But that’s what’s SO intriguing about word choice and the psychological concept of anchoring. It IS possible to present a customer with “the next best thing you have to offer” in a way that allows them accept that alternative and to leave the experience SO appreciative of your effort — even though you (and they) know that you can’t give them exactly what they want. The key is to position a response so that it is much more likely to be seen as a “win” for a customer instead of a defeat. In life, we all know that “You can’t always get what you want. But if you try sometimes, you just might find…you get what you need.” We all WANT for our customers to win. If there’s a way to help them achieve that victory, wouldn’t we want to do it? (as long as it’s not deceptive, or worse, an outright lie?)