Evaluating

Prospect Theory

Prospect theory is one of the most notable concepts to come from behavioural economics and is the cornerstone of many biases such as loss aversion, risk aversion and framing.

For Example

If you receive $100, you will feel happy. However, if you receive $200 but lose $100 on the way home, you would feel twice as bad, despite still having gained $100. This illustrates the principle of loss aversion, where the negative impact of a loss is felt more intensely than the positive impact of a gain of the same amount.

Similar Biases

Risk Aversion

We tend to remember tasks and goals that are not completed.

The Evidence

Evaluating Risk Preferences: Insights from Prospect Theory Scenarios

Participants were asked to evaluate two scenarios: Scenario 1: A) 100% chance of winning $3000. B) 80% chance of winning $4000 and 20% chance of gaining nothing. Scenario 2: A) 100% chance of losing $3000. B) 80% chance of losing $4000 and 20% chance of losing nothing. Results indicated that in Scenario 1, most participants chose Option A, even though the rational choice would be Option B. In Scenario 2, the majority of participants chose Option B, even though the rational choice would be Option A. This illustrates how individuals tend to favor certain gains and riskier losses, aligning with the predictions of prospect theory.

The Evidence

The Impact of Reference Points and Framing on Treatment Decisions in Cancer Patients

In an experiment, participants were asked to imagine themselves as cancer patients required to choose between two treatments: Treatment A, chemotherapy, and Treatment B, surgical removal of the cancer. Participants first established a reference point, framing the decision as a matter of life and death. This reference point significantly influenced their choices, as the presentation of the treatments played a crucial role. Participants tended to choose the option perceived as having the least risk after evaluating their options against the reference point they had created. This demonstrates the impact of framing and reference points on decision-making in high-stakes medical scenarios.

Affected Problems

Check the problems below the bias can help you fix in customer experience

Features

Price

Time

Experience

Customers often experience anxiety when making decisions due to a desire to avoid loss. By highlighting potential losses, we can alleviate this anxiety by making one choice more evidently favorable, thereby enhancing the overall customer experience.

Efficiency

These should appear once a challenges is submitted

Let's remove the button below and "still have questions" text

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Customer Experience Pillars

Here I need 10 horizontal dots, the ones that empty can't be clicked, others that are lit (blue color) can be clicked and content shows. A small text. Each dot has a name like Recognition, Integrity, expectations etc.

We should have two rows - one for Higher Order Needs and the other one for Lower Order Needs

Challenges

Customer Experience Pillars

Application Touchpoints

Interfaces where it can be applied most efficiently

Instruction for below blog

In the blog below, it would lead to our normal blog, with regular page structure, but once a blog article is published we should have an option to check if it's a bias realted USE CASE. Then it attributes it to this bias and lead the traffic to a generated page which has only posts / USE CASES related to this bias.

Behavioral Blog

Use Cases

Check the use cases to inspire the application of this behavioral bias

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Msheireb Downtown Doha. Customer Loyalty Program Experience Journeys

We revamped Msheireb's loyalty program by redesigning tailored customer journeys for residential tenants, visitors, and commercial tenants. This project included mapping out key stages—such as discovery, lease, and renewal—across all segments to enhance engagement and ease of use. Each journey was captured in an animated video to illustrate the improved CX flow, ensuring a seamless and satisfying loyalty program experience.
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Msheireb Downtown Doha. Customer Loyalty Program Strategy

We developed a comprehensive loyalty program for Msheireb Properties in Qatar to boost customer retention and drive revenue. The program featured a 9-stage customer journey, segmented by customer archetypes, and incorporated a closed-loop feedback strategy using NPS, CSAT, and CES surveys. Key initiatives included defining member levels, benefits, and a phased implementation plan to enhance customer experience and program viability.
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Teyaseer. Elevating CX with Real-Time Customer Feedback Integration

For Teyaseer, we mapped a 9-stage customer journey from awareness to handover, integrating NPS, CSAT, and CES surveys to capture real-time feedback via email, SMS, and calls. Automated triggers ensured timely feedback collection, enabling immediate insights and actions to enhance CX at each touchpoint.
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Aldar Hospitality. A Comprehensive Approach to Customer Experience (CX)

Aldar Properties sought to enhance customer experience across five hotels from their hospitality portfolio. Analysis of touchpoints, design of journeys and playbooks, COVID-19 game plan and other efforts led to immediate improvements in service interactions and long-term strategies for boosting guest satisfaction and loyalty.
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Aldar Education. Transforming Customer Experience (CX) through the Admissions Process

Aldar Academies revamped their admissions process by assessing the existing workflow and designing a more efficient future process. This overhaul reduced process time by 88 hours, cut complexity by 3%, decreased effort by 34%, and increased automation tenfold, streamlining operations and enhancing overall efficiency.
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Aldar Academies. Designing Escalation Strategy for Education

Aldar Academies developed a comprehensive escalation strategy to enhance customer support operations. This strategy introduced an 8-level priority system, 4 escalation stages, and a detailed escalation matrix to streamline case management and ensure timely resolution of issues.
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Wasl. Voice of Customer (VOC) Strategy Development

Implemented a comprehensive Voice of Customer (VOC) strategy for Wasl, analyzing four distinct customer types and covering 100+ touchpoints across customer journeys. A closed feedback loop was established to drive continuous customer insights, enhance service delivery, and improve overall satisfaction.
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Wasl. Customer Experience (CX) Journey Mapping in Real Estate

Defined over 90 stages and developed 18 detailed customer journeys for Wasl, spanning residential, commercial, and land leasing categories. Conducted four workshops to align stakeholders on improving customer-centric experiences and optimizing processes for future journey enhancements.
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Wasl Mobile App & Self-Service Digital Transformation

Developed over 500 wireframes and conducted a comprehensive audit of 300+ screens to optimize Wasl’s digital platforms. Created two digital strategies to streamline user journeys, focusing on a super app versus specialized apps to enhance customer experience and operational efficiency.
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Wasl. Customer Service Design for Real Estate

Renascence conducted a comprehensive customer service analysis for Wasl, a leading real estate developer in Dubai, to drive digital transformation and enhance customer experience through data segmentation, pain point identification, and strategic recommendations.
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Swarovski. Boosting retail CX through mystery shopping strategy & audits

Explore how Swarovski leverages mystery shopping insights to refine customer experiences (CX) and encourage positive shopping behaviors through targeted engagement strategies.
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Nudging customers to book services and attend their ladies salon appointments

The goal of the project was to encourage customers to make bookings after calling & improve attendances of all bookings made.
Zeigarnik Effect

Emaar Properties. Transforming conversion power, experience & design of a property sales kiosk

Emaar asked us to check how effective their current kiosk was and come up with a set of improvement or a model that can become a benchmark amongst property sales kiosks.
Zeigarnik Effect

Chalhoub Group. Transforming internal culture through a group-wide CX Academy

Our engagement with Chalhoub Group was about educating several retail brands on the importance of CX and showcasing an approach to customer experience design.
Zeigarnik Effect

Reel Cinemas. Complementing journeys & operations with a new cinema info screen UI

Reel Cinemas decided to transform the space, revamp operations by digitising them & reducing the human factor. The new screen was supposed to complement the transformation.
Zeigarnik Effect

Chalhoub Group. Putting customer experience in the center of fashion & beauty retail

Supporting Chalhoub Group in building a CX practice that would then take over the group's customer experience intiative and arming them with a bullet-proof cx design toolkit
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City Walk by Meraas: Defining what a shopping & leisure destination of the future is

How one would define a destination of the future? How can a group manage multiple destinations of different formats and consistently deliver to a range of customers?
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Transforming group-wide customer experience in Emaar Properties

Multiple departments, multiple business verticals, 18 months of engagement and many great products
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Level Shoes Behavioral & Customer Experience Transformation

Our efforts were aimed at understanding the customer and the way he shops in the fast-paced retail environment to build a cutting edge experience around him.
Sunk Cost Fallacy

Dubai Properties Real Estate Customer Experience Transformation

From signing a SPA, through the journey of becoming a homeowner in Dubai
Sunk Cost Fallacy

Provis & Khidmah: Designing & refreshing the complaint escalation matrix

As part of the engagement we were tasked to define the complaint management approach: deliver the escalation matrix with cases, SLAs, roles & priorities.
Sunk Cost Fallacy

Aldar Group Customer Experience Transformation

The engagement was driven by the group management. The effort was aimed at making Aldar a company that is driven by customer-centric solutions and services
No items found.

Emaar Customer Happiness Center CX Design & Transformation

The goal of the project was to understand how well the customer happiness center supports, guides, navigates & satisfies customers
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Transforming Free Zone Customer Journeys, Processeses and Systems

We redesigned all processes from the ground up with a customer centric approach to enable a new improved customer journey.
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Renascence Advice

When leveraging insights from prospect theory in customer engagement, it is crucial to balance its advantages with potential pitfalls. Prospect theory highlights that individuals evaluate potential losses and gains differently, often exhibiting loss aversion where losses loom larger than equivalent gains. Utilizing this understanding can enhance marketing strategies, such as emphasizing potential losses from not choosing a product or service to motivate customer action. However, overly focusing on loss aversion can lead to manipulative tactics that may erode customer trust and loyalty. To avoid these pitfalls, it is essential to apply prospect theory ethically and transparently. Ensure that communications are balanced, highlighting both the benefits of taking action and the drawbacks of inaction without resorting to fear-based tactics

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