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When people feel anxious, it’s human nature to turn to others for help. For example, an apprehensive taxpayer might want guidance from an IRS agent in interpreting a new tax law. A distressed patient might want to speak with a nurse when making sense of his blood test results.
This type of behavior is quite common. Yet many companies in high-anxiety settings – like financial services and healthcare – are funneling nervous customers to self-service technologies (“SSTs”) – kiosks, websites, and smartphone apps – isolating them at the precise moment when they’re most keen for connection. It is clear that these technologies are less expensive to offer than human support. But what’s less clear is the toll these self-service interactions may take on customers.
Is it an effective way of helping customers deal with their concerns? Or is it exacerbating customer anxiety and doing long-term damage to service relationships?
In our research, we set out to understand these questions. Through two lab experiments and one field experiment conducted in financial services, we found that anxious customers interacting through self-service technology feel dissatisfied with their decisions even when those decisions appear aligned with their goals. Their dissatisfaction reduced their trust in the service provider. But our results also reveal how a simple, and surprisingly low-cost, change – offering access to a readily-available human – can reverse the negative effects of customer anxiety.
We set our research in the financial service industry because it is riddled with uncertainty and complex decision-making known to provoke anxiety and distress for its customers. In our first experiment, we simply wanted to understand how situational anxieties – those outside of the company’s control – can crossover to affect the way customers feel about their service providers.
We developed an online investing platform to simulate the retirement planning experience. Over 150 adult participants from across the U.S. were told to allocate a hypothetical portfolio of $100,000 across stocks, bonds and cash over a series of multiple rounds with the objective of growing the portfolio. As incentive, we paid them cash bonuses based on their performance in the simulation. Some participants were randomly assigned to experience normal market conditions, which we defined as having an equal chance at a year’s stocks, bonds, and cash returns drawn from actual US history during each round of the simulation. Others experienced a greater probability of drawing from the worst stock market years in U.S. history. As a part of the investing platform, we gave participants access to historical performance information for each of the asset classes and the ability to track their own portfolio growth to help inform their decisions.
Every few rounds, we asked participants to rate how satisfied they were with a decision they had just made, as well as how anxious they felt at that time. Unsurprisingly, those experiencing more downturns reported feeling twice as much anxiety as those facing normal market conditions. They were also less satisfied with their choices, even though their portfolios actually outperformed the stock market they faced on average. (Interestingly, those facing normal market conditions, who felt less anxious, reported higher satisfaction with their choices but, on average, their portfolios underperformed the stock market.
That dissatisfaction people felt with their own choices carried over to influence how they felt about the company that provided the investment platform. When they were finished investing, participants who had been the most anxious reported trusting the company less, despite the fact that it had no control over the market they faced, or the investment decisions they made.
Since customer anxiety in online settings undermines customer satisfaction and trust, we wondered if offering customers the opportunity to connect with a real person might help. We repeated the experiment from before, but this time, we randomly split over 200 participants along another dimension: some were given the option to “chat with an expert”, others to “chat with another investor” and others still had no option to chat.
We found that when people had the ability to connect with another person – either an expert or a peer – the deleterious effects of anxiety were offset. Although people facing rocky market conditions were still anxious and again produced portfolio gains on average, those who were given the option to chat felt the same level of choice satisfaction and trust in the firm as people facing a normal market.
What really surprised us though was that very few participants took advantage of the opportunity to chat with someone. Although those who felt most anxious before the experiment were the most likely to use the chat feature, merely having the option to access a person seemed to be all most people needed to feel supported. This implies that companies deploying self-service technologies for anxiety-provoking tasks might be able to put their customers at ease, and enhance their trust in the firm, with a relatively low-cost change in design. Just knowing that we can chat with another person – even if we don’t choose to do so – seems to make a big difference.
Taking these insights to the field, we partnered with a U.S. credit union that had recently launched an online loan application process. They wanted to increase the percentage of approved applicants who completed the closing process and accessed the funds for their loans.
Over 200 applicants were randomly assigned to one of three groups: (1) those who received no contact from the credit union until their loan decision had been made, (2) those who received text messages with updates about the status of their approval process (e.g., “we have begun our review”, “we are pulling your credit report”, etc.), and (3) those who received the same messages throughout, with each message including the name and phone number of their loan officer, and an invitation to reach out with questions.
Sending applicants text messages with a play-by-play of their approval process performed worse on average than sending no messages at all, in that people who received the text messages and were subsequently approved were less likely to move forward with their loan. In a post-hoc study to understand why, we found that reminding people they are being evaluated – even though the evaluation is an expected part of the service – increases their anxiety.
In contrast, we found that the probability of approved loan applicants moving forward with their loans jumped from 64% to 80% when customers receiving those same play-by-play messages were also invited to connect with a loan officer.
As automated service processes are being deployed to engage customers, it has never been more important to understand how to balance touch and technology to deliver efficient and satisfying experiences – ones that lead to trusting, long-term relationships. Our findings suggest that using self-service technologies in high-anxiety settings can be costly. Anxious customers left to fend for themselves are less satisfied with their choices, and less trusting of the company with which they are interacting. Merely offering access to talk to a person can be enough to restore customer confidence, improve trust in the firm, and strengthen long-term relationships.