Using Behavioral Science To Boost Client Satisfaction

Like it or not, there are heavy doses of customer service involved with being an advisor. As it pertains to the advisory business, it’s not about ensuring the customer (clients) is always right as much it is making sure they’re always satisfied. At the very least, frequently content.

There are a variety of avenues through which advisors can increase client engagement and satisfaction, some of which are unique and arguably underappreciated. One of those is behavioral science and that doesn’t mean advisors need PhDs. Behavioral science is as simple as it implies – it’s the study of human behavior.

It’s often said that human behavior doesn’t change and that’s particularly true in financial markets, but there is substantial value in advisors leveraging behavioral science when it comes to enhancing client service. After all, behavioral science can provide advisors with valuable insight regarding how clients are feeling and what they’re thinking. That’s almost like having a “cheat sheet” when it comes to providing better service.

Behavioral Science: An Intangible Asset for Advisors

Behavioral science amounts to another tool in an advisor’s toolbox and Renée Richardson Gosline, Head of the Human-First AI Group at MIT's Initiative on The Digital Economy, highlights the benefits of such utility. She’s one of the pioneers in helping advisors leverage aspects of behavioral finance to improve client happiness.

One way of properly harnessing behavioral science is to consider through the lenses of key performance indicators (KPIs). Too often, advisors think about KPIs in linear fashion while ignoring how arriving at the KPI affects client emotions.

“Dr. Gosline stresses a probabilistic lens of client experience: the probability of any KPI is the sum of what happens at all customer touchpoints. And, because you can shape these touchpoints, you can also shape your client's experience and improve their decision-making,” notes State Street Global Advisors (SSGA).

An instructive metaphor posited by Gosline is Chutes and Ladders – a board game many of us played as children. Put simply, using behavioral science, advisors can convert client ladders into chutes.

“One way to convert ladders into chutes is to use nudges. Nudging isn’t about making someone want to do something they don't already want to do; it’s about creating a conducive choice context based on an alignment of goals. It’s an approach to designing systems that help people achieve their goals,” adds SSGA.

Framework Matters

Bringing context to behavioral science’s applications with clients is essential in garnering successful outcomes. Translation: establishing a framework is pivotal.

That can include experimentation, mapping out the journey, articulating important points with data and prescribed improvements.

“Engaging in direct conversations with clients about their journey will help them feel heard and become co-creators of their experience. That way, when you apply the framework to create the optimal client experience, you’re able to consider not only the information and data you have, but also your client’s perspective on their experience,” concludes SSGA.

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