Applied behavioural economics

Genesis Analytics has the first specialist team of behavioural economists in Southern Africa.

Behavioural economics studies how contextual factors affect human decisions. As specialists in human behaviour and decision-making, we help businesses grow and become more profitable by effecting large-scale customer behaviour change using behavioural economics.

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Expertise Areas

Behavioural analysis

Decision mapping

We analyse and break down the targeted behaviour into a list of component decisions, a process which results in a customer decision map. In doing so, we are able to specify the full list of levers available to us to stimulate behaviour change, as well as all the possible barriers and benefits or motivators for a specific behaviour.

At times the process of creating a Customer Decision Map requires primary research in the form of focus groups, in-depth interviews, or the like. At other times the component decisions are well known and require only light secondary research or direct behavioural observation.

Behavioural analysis and segmentation

Through the course of analysing customer behaviour in order to build Customer Decision Maps, discrete customer segments or groups either emerge intuitively, or are identified through data processes. It is important that each of these segments can be isolated because, although behavioural economics lays claim to universal explanatory power, segments have different nudge sensitivity, which must be borne in mind in the design of nudges. Also, different segments often engage with the various touchpoints of a company in different ways. This is borne in mind when crafting and prioritising communication strategies.

Behavioural research and insights

The modern understanding of behavioural economics has a strong impact on how any research and insights process should be run. For example, we know that group-think, confirmation bias and more have an immense impact on focus groups and traditional approaches to surveying customers.

Any process that seeks to understand customers through primary research should be well aware of the various behavioural pitfalls. Designing research approaches in consultation with behavioural economists will likely yield more robust and trustworthy insights.

Behavioural change

Nudge design

The core role of the Applied Behavioural Economics team is to have a deep understanding of the discipline and a firm grasp of how the various tenets of behavioural economics can be used to change human behaviour.


We refer to this process as designing the nudges, or setting up the choice architecture. That is, finding cutting edge, practical (and often highly cost-effective) ways of changing behaviour through behavioural science.

Loyalty and incentive design

While the role of incentives are important for long-term behaviour change, they are slightly different to what we see as pure behavioural economics. Despite this, the many important lessons that behavioural economics provides in this area are only recently beginning to be widely understood.


The team leverages important concepts such as Loss Aversion (the fact that humans feel loss twice as strongly as an equal gain) to assist clients in designing incentives and loyalty programmes that meaningfully affect behaviour.

Prototyping

Even specialists in human behaviour understand that it is difficult, if not impossible, to predict behaviour in advance. Humans are so complex, and contextual factors so varied, that it becomes essential to field test any important behavioural change.

Field testing and piloting

In conducting these champion-challenger tests, we narrow the pilot to a sub-sample of the population. This allows the team to learn which hypotheses work, which do not, and, ultimately, how to improve the impact of the new approach.

Channel and campaign optimisation

We optimise channel environments – from intermediaries to call centres and digital campaigns – using tests and pilots to realise customer behavioural change. Depending on the requirements of our clients, we also roll out the test results to larger operational environments, ensuring the realisation of the full benefit of the intervention.

We aim to deliver a 200% return within a few months of our involvement, which has been easily achieved within a range of different contexts and industries.  For example, our work has resulted in improvements to an upsell campaign of 27%, a retention campaign of 155%, and a customer migration campaign of more than 500%.

Behavioural economics capacity building

After demonstrating the effectiveness and impact of behavioural economics, clients often ask our team to assist in building internal capability and training.

Internal capacity building takes between two and six months. Typically it includes:Creating a functional unit-wide conceptual understanding of behavioural economics; upskilling the internal intellectual custodians; creating a successful delivery precedent together with the newly minted intellectual custodians; and constructing behavioural economics training materials and toolsets for future internal use.

We conduct one- and two-day training sessions in behavioural economics with management and executives. Tailored to the needs of the client, these sessions give participants a fundamental understanding of key behavioural tenets and a good grasp of how to apply them in order to achieve their business objectives. A ‘next steps’ process is also undertaken during the session, allowing the client to take the process further internally.

Projects

Behavioural economics lifts insurance sales by 89%

Project name:
Behavioural economics capability in analytics

Service:
Applied behavioural economics

Sector:
Financial services

Area of Expertise:
Behavioural analysis
Behavioural change
Behavioural economics capacity building

Client:
Large South Africa bank

Date:
2016

Country:
South Africa


Genesis Analytics conducted a three-month project in a large South African bank to showcase the value of behavioural economics. The result was an 89% increase in short-term insurance sales through the bank’s contact centre.

The project involved two workstreams: the first educated and embedded a common language across the value chain; the second demonstrated the power of applying the science in a live campaign environment.

The work began with a full day’s training facilitated by our UK partners, London Economics. This was followed by eight seminars, which revisited in depth the content from the training session. The seminars used a combination of videos, case studies and facilitated discussion to explore highlighted issues. Attendees came from a range of areas within the bank including insurance, analytics, customer insights and more.

In the second workstream, the Genesis team was asked to investigate how leveraging behavioural economics in a short-term insurance contact centre could increase the quality of conversations and therefore sales.

A key challenge identified was that conversations were too general and often resulted in information overload on the customer's part, particularly at the introduction stage of the call. Genesis overcame this challenge and others with better analysis and an ability to uncover the actual customer decision journey at play. 

Customer communications were redesigned to tailor the conversations to each customer context based on internal customer data. These communications aimed to decrease information overload by leveraging herd effect, priming, framing and exclusivity.

Making this detail available to the contact centre agents enabled them to identify and address the specific needs of each customer and help them to make the right insurance decisions. The outcome was an increase in sales of between 89% and 100%.

Following these successful results, our team was retained to leverage behavioural insights across all contact centre teams.

Nudging South Africans to save for their retirement

Project name:
Encouraging South Africans to save for their retirement

Service:
Applied behavioural economics

Sector:
Financial services

Area of Expertise:
Insurance and asset management

Client:
Global insurance provider

Date:
2015 - 2016

Country:
South Africa


In South Africa, retirement benefits accumulated through such instruments as pension and provident funds are only accessible to policy-holders at specific times, such as when they change employers. It is well documented that withdrawing funds before retirement is the main reason why most South Africans cannot afford to retire when the time comes.

The Applied Behavioural Economics (ABE) team worked with a global insurance provider’s outbound call centre to encourage more South Africans to save adequately for retirement by ‘conserving’ or reinvesting their retirement reserves rather than withdrawing them when they have the option.

Using the principles of behavioural economics, the call centre script was changed in a way that led to a 140% increase in the value of retirement benefits conserved. For the insurer, this realised considerable value, given that it will conserve close to R600-million in 2016, off a base of R250-million in 2015. The project therefore delivered a 19-times return on investment.

The team was again retained by the client recently to broaden the impact of this work within the firm by rolling out learnings across the entire contact centre. To train the entire contact centre, the ABE team established a new approach based on behavioural economics itself. The ABE team appealed to a powerful behavioural economics heuristic, the self-generation effect. In short, the self-generation effect maintains that people are more likely to remember that which they think of themselves. In this way, this heuristic was used to develop an approach that would both keep the agents engaged and ingrain the tenets of behavioural economics in their daily work.

Specifically, the team created a new training game designed to help the agents recreate customer communications through a behavioural economics lens: the agents were trained in relevant behavioural economics tenets and then, using playing cards designed by the ABE team, they were asked to determine how these tenets would fit into customer communication scenarios.

The team found that letting the agents figure out, by themselves, how to apply behavioural economics to their communications greatly improved engagement with and understanding of the work implemented. The training proved to be very successful and to date the full roll out of the behavioural economics-informed approach has shown an increase in daily funds retained by over 155%, as compared with the 140% increase experienced during the POC.

Practically the value unlocked for the client will amount to an increase in assets under management of close to R388-million by the end of the year.

Assessing East European bank’s branch network

Project name:
Assessing improvements on East European retail bank’s branch network performance

Service:
Applied behavioural economics

Sector:
Financial services

Client:
Large East European retail bank

Date:
2015

Country:
Croatia


Genesis was commissioned to conduct an in-depth assessment of the way in which behavioural economics could improve the commercial performance of a retail bank’s branch network.

A number of key opportunities were identified, some of which will be executed internally and others which will be executed in partnership with Genesis.

Nudging customers into branches to increase sales

Project name:
Nudging customers into branches and increasing sales conversions

Service:
Applied behavioural economics

Sector:
Financial services

Client:
Large retail insurance provider

Date:
2015 - 2016

Country:
South Africa


A large retail insurance provider retained Genesis to leverage behavioural economics in its branch redesign. 

By changing marketing collateral in the windows of branches, posters inside the branches and brochures offered to customers, and by instituting new lead management processes, the team was able to significantly improve footfall and sales conversion rates within branches.

Increasing sales conversion with behavioural economics

Project name:
Increasing sales conversion rates using behavioural economics

Service:
Applied behavioural economics

Sector:
Financial services

Client:
Large retail insurance provider

Date:
2015

Country:
South Africa


By leveraging a handful of key behavioural economics tenets in contact centre sales scripts, the Genesis team was able to significantly increase the sales of a short-term insurance for a large retail insurer.

Using a rigorous champion-challenger approach, the team was able to demonstrate a 16% increase in sales per agent per day, simply by using tools related to biases such as anchoring and reciprocation.

Improving cross-selling with behavioural economics

Project name:
Improving cross-selling rates using behavioural economics

Service:
Applied behavioural economics

Sector:
Financial services

Client:
Large retail insurance provider

Date:
2015

Country:
South Africa


The contact centre of a large short-term insurance provider retained Genesis to assist in rewriting its cross-selling scripts using the principles of behavioural economics. This process enabled the team to effect a 15% increase in the ability of call centre agents to cross-sell additional insurance lines, moving the unit from being a cost centre to a profit centre. As a result of this work, the team was retained on a long-term basis to assist with change management in the contact centre.

Improving customer retention rates

Project name:
Improving the rate of customer retention in a contact centre

Service:
Applied behavioural economics

Sector:
Financial services

Client:
Large life insurance provider

Date:
2015

Country:
South Africa


A large life insurance provider retained Genesis to assist in redesigning its customer conversations. 

By leveraging behavioural concepts such as anchoring, herding and hyperbolic discounting, the effectiveness of staff in the contact centre improved by 139%, leading to an additional R250-million in insurance premiums being collected over the year.

Optimising debt collection using behavioural economics

Project name:
Optimising debt collection using behavioural economics

Service:
Applied behavioural economics

Sector:
Financial services

Client:
External debt collector

Date:
2015

Country:
South Africa


A large external debt collector retained Genesis to assist in optimising its debtor conversion rate. 

By using key behavioural economic tenets, agents in the contact centre were able to dramatically improve the effectiveness of their conversations.

A robust champion-challenger pilot demonstrated a 33% increase in debt collections, simply by changing the way agents engaged with debtors.

Improving the onboarding of customers

Project name:
Improving the onboarding of customers

Service:
Applied behavioural economics

Sector:
Communications and media
Entertainment

Client:
Large home entertainment provider

Date:
2014

Country:
South Africa


During the onboarding phase of the customer journey, certain norms and expectations are established. Genesis was retained to assist in ‘nudging’ customer behaviour in specific ways during this phase, using the principles of behavioural economics. The project team piloted a new approach to onboarding, which led to a 47% reduction in missed payments and a 25% increase in upselling of certain products, as well as a more than doubling of self-service usage.

Improving self-service engagement with behavioural economics

Project name:
Improving self-service engagement and usage using behavioural economics

Service:
Applied behavioural economics

Sector:
Communications and media
Entertainment

Client:
Large home entertainment provider

Date:
April to July 2014

Country:
South Africa


A large home entertainment provider retained Genesis to assist in increasing its customers’ engagement with self-service channels. By introducing a new technique in the contact centre, the team was able to increase self-service channel engagement over the long term by 147%. This allowed the client to steadily reduce its investment in costly channels such as branches and the contact centre.

Winning customers with behavioural economics

Project name:
Optimising the onboarding of customers using behavioural economics

Service:
Applied behavioural economics

Sector:
Communications and media
Manufacturing

Client:
Pan-African home entertainment provider

Date:
2014 – 2015

Country:
South Africa


A Pan-African broadcaster requested the Applied Behavioural Economics team to assist in changing customer behaviour during the customer onboarding stage, which is crucial in setting expectations and establishing behavioural norms. For example, in the onboarding stage customers learn about the various products available to them and how much these cost. They typically also learn more subtle behaviours, such as which service channels are useful for which queries.

In this engagement we optimised the onboarding process to increase product up-sell, cross-sell and first-time payment behaviour. We were able to equip customer service representatives with the tools to achieve these objectives and have positive conversations with customers. For example, staff could conduct a needs analysis with customers using only three questions, dramatically increasing their ability to match customers to the correct product (without complicating the conversation).

Through this work the customer service representatives were able to increase up-sell by up to 26% on certain products, while reducing the proportion of customers who missed their first payment by 45%. This realised considerable value for the firm, given that the client struggled with these objectives for many years before our involvement.

Meet the Team

Areas of Service Expertise

  • Behavioural analysis
  • Behavioural change
  • Prototyping
  • Behavioural economics capacity building

Related Sectors

Projects

Project

Behavioural economics lifts insurance sales by 89%

Genesis Analytics conducted a three-month project in a large South African bank to showcase the value of behavioural economics. The result was an 89% increase in short-term insurance sales through the bank’s contact centre.

View Project
Project

Nudging South Africans to save for their retirement

Genesis worked with a global insurance provider’s outbound call centre to encourage more South Africans to save adequately for retirement by ‘conserving’ or reinvesting their retirement reserves rather than withdrawing them when they have the option.

View Project

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Leading the team

Neil Lightfoot

Partner (Applied Behavioural Economics)

Neil Lightfoot
Partner (Applied Behavioural Economics)
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Brendan Meehan

Manager

Brendan Meehan
Manager
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​Sarah Magni

Manager

​Sarah Magni
Manager
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