Service Management Strategy

By John Lok

Behavioral Economics and Service Delivery Standards

Social Norms and Peer Comparison

Behavioral economics introduces the use of social norms to influence service standards. Humans are social creatures who look to others to determine appropriate behavior.Service providers can influence standards of behavior among their clientele by sharing data on what the "majority" of peers are doing.

For instance, utility companies have improved service efficiency and conservation standards by including "peer comparison" data on monthly bills, showing customers how their energy usage compares to their neighbors. This creates a self-regulating standard of behavior that does not require expensive enforcement or traditional incentives.

Incentives and Commitment Devices

While traditional economics relies heavily on monetary incentives, behavioral economics suggests that the timing and structure of these incentives are more important than the amount. Service delivery standards can be enhanced by using commitment devices, where customers or employees "pre-commit" to a future goal.

My List's research into charitable giving and market incentives shows that "loss-framed" incentives (where a bonus is given upfront but taken away if a standard is not met) can sometimes be more effective than traditional "gain-framed" bonuses.This insight allows organizations to refine their internal service standards to better motivate staff and ensure consistent quality.

• Format: Paperback
• Language: English
• ISBN: B09WYWFT1K
• ISBN13: 9798886417579
• Release Date: March 2022
• Publisher: Notion Press
• Length: 146 Pages
• Weight: 0.80 lbs.
• Dimensions: 0.4" x 8.5" x 8.5"