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Improving Data Overage Disclosure Practices

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Jan 28, 2019

One of the major frustrations for consumers when interacting with companies is a lack of transparency in the fees they are paying for a service. This creates a sense of distrust and skepticism, where consumers feel like they are being “cheated” or “scammed” by big corporations. From a behavioral science perspective, understanding how trust is built and maintained is a critical point in the consumer journey to not only improve conversation rates but also customer retention.

From a consumer’s perspective, decreased trust lowers the perceived value of the company. If this perceived value is lower than the economic cost of the service, a loose-loose scenario is created for both the brand and the consumers. As a non-profit, The Decision Labs aims to leverage behavioral science in order to create win-wins between companies and consumers. We believe that both the consumer and the company can benefit from a better understanding of the product and the people that use them. Ultimately, those who succeed and continue to grow are those who leverage a deeper understanding of their consumer’s needs, biases and preferences and turn them into design opportunities. By guiding the design of customer interactions, the principles of behavioral science offer a simple, low-cost route to improved customer satisfaction and retention.

To illustrate this, we ran an online study that showed how improving data overage disclosure practices can improve consumers’ overall trust, loyalty and likelihood that they will recommend the provider. In 2017, Canadians spent about 1.3 Billion in overage fees according to the CRTC. Naturally, this creates frustration and friction that can, potentially, erode provider-client relationships by giving them a reason to distrust their providers. As a consumer, the cost of switching to another provider is low and the options are plenty. Therefore, optimizing for customer loyalty, especially at these friction points, is critical to customer retention.

Our sample size consisted of 104 Canadians (42% Female; 35% < 50,000 CAD household income; 18% Telus; 18% Rogers; 13% Bell Customers; 10% Koodo; 12% Fido; 8% Virgin; 2.8 years average time with current provider). We provided participants with a hypothetical month of text messages about data usage from a provider and asked them to rate the provider based on these interactions. We used a baseline message from a major Canadian provider and then created a series of messages based on behavioral economics concepts such as framing, salience, and social norms. For example, the standard warning message warned: “If you go over before then, your standard data rates will apply.” We attempted to convey that the provider has the consumer’s best interest in mind: instead of a warning, we advised “To avoid additional charges, learn how to manage data usage…” We found that these small changes in copy were able to have significant effects on consumer attitudes.

chart - attitudes towards telecom providers

About the Authors

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Dan Pilat

Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.

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Dr. Sekoul Krastev

Sekoul is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. A decision scientist with a PhD in Decision Neuroscience from McGill University, Sekoul's work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.

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I was blown away with their application and translation of behavioral science into practice. They took a very complex ecosystem and created a series of interventions using an innovative mix of the latest research and creative client co-creation. I was so impressed at the final product they created, which was hugely comprehensive despite the large scope of the client being of the world's most far-reaching and best known consumer brands. I'm excited to see what we can create together in the future.

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