7 Things You Need to Know About the Psychology of Customer Service

The secret to offering top notch customer service, and getting your existing customers to stick with your brand, is understanding consumer behavior. When you fully grasp this, you’ll learn what they really want from your business and how to best offer that to them.

In general, it's certain that people want a great customer experience. According to ClaraBridge, 45 percent of customers are willing to pay more for a better customer service. But as the number of customers increases, understanding what makes for a good experience for each of them can be time-consuming.

Thankfully, technology has made it much easier – and faster – to analyze and comprehend the psychology of customer service. Especially when that tech is combined with a wealth of years-long market and consumer research, you have the tools to motivate your customer service agents with psychology and deliver the kind of customer service that your customers want.

Related: Top Customer Psychology Hacks to Redefine Customer Communication

Here are 7 factors that will help you understand customer service psychology.

1.  Customers will pay more for a personalized service

“The goal of the company is to have customer service that is not the just the best, but legendary.” – Sam Walton

No matter your sector, personalization is a great way to connect with your customers.

To start personalizing communications, it pays not to think of your customers as part of a homogenous group, but rather as individual people. If you do it right, sales can increase by up to 19 percent.

There's an interesting study published in the Journal of Applied Psychology, where researchers tested what effect waiters providing mints along with the check had against a control group where no mints were given. The objective being to measure their effectiveness in increasing tips.

In the first group, waiters gave mints without mentioning them. Interestingly, this resulted in a 3 percent increase in tips. But, when the waiter brought the check and a few mints and came back later with another set of mints, letting the customers know they had brought more in case they wanted another, there was a 21 percent increase against the control group.

Of course it’s not about the mints themselves, but the personalized experience they created, showing the business actually cared about the customer.

Take this principle and implement it into your own business. Show customers you care about their well-being and experience.

On the flip side, if you don’t adopt a personalized approach, there are likely to be negative consequences. Data from MarketingCharts found that lack of personalization is one of the main reasons customers switch providers.

From your homepage to your checkout page, and even post-purchase, you can use personalization to delight your customers.

2.  Even small changes inspire customers to take action

Dr. Robert Cialdini, Professor of Psychology at Arizona State University, conducted a consumer study into the donation process for the American Cancer Society, and how a tiny change in what was said could dramatically improve results.

Below, you'll see two different phrases used to request a door-to-door donation. Researchers tested the effect of the slight variation in the copy (i.e., wording).

(1). “Would you be willing to help by giving a donation?”

(2). “Would you be willing to help by giving a donation? Every penny will help.”

Can you guess which of these questions generated the best results?

Researchers found that people who received the second variation were more likely to donate, showing how people are more willing to take action even when smaller changes happen that changed the impact of the phrasing.

People like to be specific, and they want to make an impact. That’s exactly what the second variation communicated.

To implement this principle, test out different wordings. To build invaluable customer service, make sure you're clear and transparent. Show people what they stand to gain by taking an action and/or evoke pleasant emotions.

3. Social media is a great tool to build trust

“The customer’s perception is your reality.” – Kate Zabriskie

Being active on social media platforms means customers can get in touch with you immediately and feel heard. You can speak directly to each one of them and build trust.

According to one report, more than 2.7 billion users were active on social media in 2017 highlighting the level of reach on offer. Providing customer service through social media also creates a way of converting customers into brand advocates through their sharing of experiences.

4. Learning new things changes brain chemistry

Research shows that learning causes changes in your hippocampus. This means that, as Meg Selig in Psychology Today puts it, “enriching your mind by learning new things rewires your brain”. For customers, this can result in them engaging more with your company and feeling more positive towards their experiences with you.

So, whenever you teach, instruct, guide, give insights, or recommend a new idea or thoughts to your customers, this engages their mind. If they were thinking of switching to another brand, they’ll start to re-evaluate because you've caught their attention.

One thing you can do is educate them on the value of your product, not the price. Refocus the way they look at your brand by teaching them how to use your product, how to upgrade or downgrade, or anything that would affect their way of thinking in a positive way.

5.  Customers want to hear stories

Do you want to create a memorable customer experience in real-time? If you are, then you need to tell your brand story.

Marcus Sheridan, the founder of River Pools and Spas, was on the verge of calling it quits – he dabbled into all sorts of marketing strategies but none of them produced the desired outcome.

Then, he decided to turn to a tried-and-true way of engaging others: storytelling. As the research work led by Melanie Green and Timothy Brock shows, persuading people by telling them stories works extremely well — especially when the story is relevant to your offer in some way.

With this approach, Sheridan's Fiberglass Pools Company, once nose-diving, suddenly started blooming. Clients who were willing to pay thousands of dollars to have a pool installed in their homes started to turn to his team.

Through storytelling, you can really engage customers without needing to directly ask them to buy your product. You don’t even have to tell customers how great your product/service is, just tell them the story of how it helped someone else.

6.  Address customers by their names

This may seem very simple, but it’s still a very good way of weaving personalization into your operations. Humans are wired to like the sound of their own name: hearing ourselves being called reaffirms our individuality.

When it comes to customers, this can result in higher loyalty and satisfaction.

So, get to know your customers' names and use them. A positive experience there will impact your customers’ view of you in a number of other areas, a phenomenon often referred to as “Halo Effect.”

7.  Encourage customers to identify with your brand

“Kindness and courtesy are at the root of a positive customer service experience.” – Shep Hyken

If you can get your customers to believe in your brand, they will stick with you, and tell others about their good experiences.

To do this, you need to make them feel good. This comes partly from addressing their needs with your product, but the overall experience they have with you is vital.

Give your customers positive reasons to talk about you, think about you, and keep you front of mind. For example, use corporate social responsibility initiatives and give back to the community when you can. Try to communicate your mission, your vision, and how what you do makes your customers' lives better.

In time, customers will come to strongly identify with you. With your brand embedded in their thinking, you will quickly come to mind for any other relevant needs, or when advising others how to address their own needs.

Psychology matters

Customer service psychology should inform your marketing strategy, in fact your business as a whole. Being able to understand others and speak to their needs has impact on marketing, sales, product, even your managerial departments, and their decision making processes.

Learn to listen to customers. Give them opportunities to speak, and when speaking to them, do so with respect – knowing that by using “positive language”, you create positive feelings

We hope we helped you learn more about the psychology of customer service.

Laduram Vishnoi

CEO, Acquire.io

Laduram Vishnoi is Acquire’s President & Co-founder. He enjoys building companies and scaling product teams. He’s passionate about AI, machine learning, neuroscience, and meditation.