How to end bad customer service by understanding the economics of it

Danny Fabricius Fogel

Danny Fabricius Fogel

Today we shared this press release:

How to end bad customer service by understanding the economics of it

A new planned collaboration between behavioral scientists and AI tech platform is now set to understand the economics of customer service.

You might have experienced to visit a store, café, or restaurant with the intention of buying something, but ended up not doing so due to bad service or no service at all.
So did the two Frontliners founders, Jeannette and Danny and set out to fight bad service experiences. This summer, Frontliners caught the attention of behavioral economists John List, Distinguished Service Professor at University of Chicago and Luigi Butera, Assistant Professor Of Economics at Copenhagen Business School, both founders of the Institute for Behavioral Economics.

It’s not a local problem as bad service is happening everywhere in the world.

The main influencers on service experiences are people. People who work in the stores, cafés, and restaurants we are visiting. None of those great people are trying to deliver bad service experiences, so why do we ever experience bad service or no service at all? There are many reasons for that, but Frontliners founder Danny believes there are some main things to focus on to end bad service experiences:

  • • You must hire people who fits the job, team, and company culture.
  • You must enable them to do great, by giving them the right knowledge and motivation.
  • Training, information, and motivation must be perfectly selected and timed for each person and for each shift.
  • Continuously measure when you deliver great service experiences and when you don’t.

This is not simple to do as it’s a lot of pieces to get in right places. However, you can’t solve bad service without getting everything just right, so that’s what we are trying to do.

That’s why Frontliners are supporting the whole employee value chain and are using AI and behavioral experiments to learn how to drive managers and employee’s behavior towards whatever has the most positive influence on great service experiences.

“We are super excited about this collaboration, as John and Luigi are some of the most prominent and experienced scientists and we are certain that they can set up experiments that will help us find ways to drive managers and employee’s behavior towards doing their utmost to deliver great service experiences.” Says Danny and continue; “John is now Chief Economist at Walmart and has both Uber and Lyft on his resume. We are humble and honored that he and Luigi has decided to work with us on this important mission to end bad service”.

Luigi Butera is equally excited; “In most of our work we do experiments to understand the causal effects of different incentives, organizational arrangements, and behavioral frictions on people’s decisions. We partner with firms and organizations to conduct our research in policy relevant settings, creating new scientific knowledge about human behavior, markets and institutions, and delivering science-driven insights to partner organizations. Our goal is to make the world a better place through rigorous economic science”.

The collaboration is to start this October and the first results expects to be in the hands of Frontliners users in the spring 2023. Frontliners are not starting from scratch. Danny Fabricius Fogel has been sending out employees to help some of the world’s largest brands promote their products since 2008. That has been extremely helpful as a learning experience for the Frontliners platform.

Danny explains “We launched the platform a while ago and have great traction” he continues “It’s been a while on its way as we wanted to make sure to support the full employee value chain before we launched. We wanted the platform to have all the tools to hire the right people, train and motivate them perfectly for their shifts, and continuously measure their performance.” And finish “That’s the only way to end bad service experiences.”

About Institute for Behavioral Economics

The Institute for Behavioral Economics (IBE) (https://www.behavioral-economics.org) is an international research and outreach institution that connects organizations interested in improving their businesses through economic science, and researchers interested in generating and publishing new insights into human behavior, markets, and institutions. IBE has extensive experience in conducting rigorous research relevant for both organizations and academia. IBE is headquartered at CBS ECON and the University of Chicago.

About Luigi Butera

Luigi Butera is an Assistant Professor of Economics at Copenhagen Business School (CBS), Department of Economics. He is also the co-founder and director of the Institute for Behavioral Economics at CBS and the University of Chicago (www.behavioral-economics.org). He has published in general interest science and economics journals, such as the American Economic Review and PLOS biology, and in 2021 he was awarded a DFF Sapere Aude Research Leader Starting Grant for his research agenda on memory and expectations. Prior to CBS, he was the Dan Searle research fellow at the University of Chicago.

About John A. List

John A. List is the Kenneth C. Griffin Distinguished Service Professor in Economics at the University of Chicago, and holds the appointment of Distinguished Professor of Economics at the Australian National University. His research focuses on combining field experiments with economic theory to deepen our understanding of the economic science. In the early 1990s, List pioneered field experiments as a methodology for testing behavioral theories and learning about behavioral principles that are shared across different domains. To obtain data for his field experiments, List has made use of several different markets, including charitable fundraising activities, the sports trading card industry, the ride-share industry, and the education sector, to highlight a few. This collective research has lead to collaborative work with several different schools and charities, as well as firms including: Lyft, Uber, United Airlines, Virgin Airlines, Humana, Sears, Kmart, Facebook, Google, General Motors, Tinder, Citadel, Walmart and several non-profits. His research includes over 200 peer-reviewed journal articles and several published textbooks. He co-authored the international best seller, The Why Axis, in 2013, and is author to a new best seller, The Voltage Effect. List was elected a Member of the American Academy of Arts and Sciences in 2011, and a Fellow of the Econometric Society in 2015. List received the 2010 Kenneth Galbraith Award, the 2008 Arrow Prize for Senior Economists for his research in behavioral economics in the field, and was the 2012 Yrjo Jahnsson Lecture Prize recipient. He is a current Editor of the Journal of Political Economy.

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