Evaluating
Sunk Cost Fallacy
This occurs because as humans we are loss averse and want to avoid this at all costs which is related to effort justification. Eventually, this leads to dissatisfactory outcomes & failed expectations.
For Example
A well-known example of the sunk cost fallacy, often referred to as the "Concorde Fallacy," involves the joint investment by the French and British governments in the Concorde supersonic aircraft. Despite escalating costs and clear indications that the project would not be financially viable, both governments continued to invest in it. The Concorde operated for 30 years but never recouped the extensive expenditures, resulting in significant financial losses.
Similar Biases
Loss Aversion
We tend to remember tasks and goals that are not completed.
The Evidence
The Impact of Discount Offers on Theatre Attendance: A Study on Season Ticket Holders
Researchers observed 3 groups who had the intention to buy season tickets for the theatre. The first group was offered no discount and paid the full $15 for their ticket. The second who already had the intention of buying a season tickets was offered a $2 discount and the third group was offered a $7 discount. Results showed that group 1 attended an average of 4.11 shows, group 2 attended an average of 3.32 shows and group 3 attended an average of 3.29 shows.
The Evidence
The Sunk Cost Fallacy in Ski Trip Decision Making: An Experiment by Arkes and Blumer
In an experiment by Arkes and Blumer, participants imagined purchasing a $100 ski trip to Michigan and a $50 ski trip to Wisconsin, later discovering both trips were non-refundable and scheduled for the same weekend. Despite being told they would enjoy the Wisconsin trip more, 54% chose the Michigan trip. This decision was attributed to the sunk cost fallacy, where individuals irrationally persist with an option due to prior investments, disregarding future benefits.
The Evidence
Affected Problems
Check the problems below the bias can help you fix in customer experience
Features
Price
Time
The sunk cost fallacy can lead to wasted time as customers feel compelled to continue investing in a brand due to their prior investments of time and resources. This persistence, driven by the desire not to "waste" their previous efforts, can exacerbate customer frustration, particularly if the ongoing experience does not meet their expectations or needs.
Experience
Efficiency
Challenges
Customer Experience Pillars
Application Touchpoints
Interfaces where it can be applied most efficiently
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.
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Msheireb Downtown Doha. Customer Loyalty Program Strategy
We developed a 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.
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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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Modon. Customer Journey Mapping and VOC Strategy for Real Estate Excellence
We partnered with Modon, a UAE real estate developer, to enhance their CX strategy for a 36-month project involving 350+ townhouses, villas, and apartments. The strategy featured customer journey mapping, communication improvements, and a closed-loop Voice of Customer (VOC) system.
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Aldar. CX Governance and Reporting Framework Implementation
Aldar Properties partnered with us to establish a CX governance program, evolving into the CX Committee (CXC), overseeing CX across multiple business units. From January 2022 to January 2023, over 10 reports were produced, evaluating key business units, with insights from Voice of Customer (VOC) and mystery audits.
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Aldar Hospitality. An 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 Hospitality. Escalation Strategy Framework for Efficient Case Management
Aldar Hospitality developed a escalation strategy featuring an 8-level priority system, 4 escalation channels, and a detailed matrix to manage and resolve issues effectively, ensuring prompt attention for urgent matters and efficient handling of less critical cases.
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Aldar Academies. Designing Escalation Strategy for Education
Aldar Academies developed an 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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Aldar. VIP Program Design for Customer Loyalty and Engagement
The VIP Program by Aldar Properties introduces a dynamic tiered loyalty system aimed at increasing customer engagement and loyalty. Tailored to reflect the spending habits and preferences of Aldar’s diverse customer base, the program includes exclusive tiers for high-profile clients like celebrities and Sheikhs. Key elements include early access to projects, premium perks, and personalized services, all designed to reward and retain valued customers.
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Aldar Academies. Education Customer Experience (CX) Journeys and Escalation Strategy
Developed a strategy to enhance the customer experience (CX) for Aldar Academies, focusing on students and parents during the COVID-19 pandemic. The project included defining 9 customer journey stages, identifying 70+ steps, and addressing over 120 pain points.
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Wasl. Voice of Customer (VOC) Strategy Development
Implemented a 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 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 Properties. Development and Integration of Process Maps for Operational Efficiency
Developed 123 detailed process maps for Wasl, a leading real estate developer in Dubai, to streamline operations, ensure seamless Salesforce integration, and enhance efficiency across seven business units, improving internal workflows and customer experience.
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Wasl. Customer Service Design for Real Estate
Renascence conducted a 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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SODIC. Commercial Real Estate CX Strategy and Customer Experience Enhancement
Spearheaded a year-long CX transformation for SODIC, focusing on enhancing commercial strategies, customer journeys, and VOC programs. Involved 12 months of continuous reporting, evaluation of 4 key business units, and the generation of over 10 CX and VOC reports to drive customer satisfaction and market competitiveness.
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SODIC. Implementation of Voice of Customer Strategy for Enhanced Engagement
Designed a robust Voice of Customer (VOC) strategy for SODIC, incorporating 10 data collection methods, 3 key CX metrics (NPS, CSAT, CES), and analyzing 9 software solutions to enhance customer satisfaction and feedback management.
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SODIC. Real Estate Communication Strategy for Enhanced Customer Engagement
Evaluated communication practices across 14 departments, streamlined 5 key processes, and reviewed 106 documents from 3 business units. Developed a communication strategy that ensured consistency, clarity, and brand alignment, while improving customer engagement and stakeholder management.
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SODIC. Real Estate Customer Experience Strategy for Enhanced Engagement and Satisfaction
Developed a CX strategy for SODIC, identifying eight customer types, conducting 46 stakeholder sessions, and addressing 400+ pain points across 76 customer journey steps. The strategy included customer segmentation, a VoC program, and governance model implementation, leading to significant improvements in customer satisfaction and loyalty.
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SODIC. Real Estate Customer Experience (CX) Journey Mapping
Developed six detailed customer journeys for SODIC, including three "as-is" journeys and three "future" journeys. Defined 5+ stages and 26+ steps, with over 400 internal tasks documented. Identified pain points and opportunities to enhance the customer experience through meticulous research and strategic improvements.
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SAAS Properties. Enhancing Real Estate Sales Launch Customer Experience (CX)
Bridging Organizational Gaps to Elevate CX at SAAS Properties
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SAAS Properties. Transforming Customer Experience (CX) through Customer Rituals and Cultural Change
SAAS Properties elevated its customer experience by embedding 7 key CX rituals and creating 4+ personalized greetings across various communication channels. These rituals were designed to enhance 10 critical stages of the customer journey, from the initial sales gallery visit to the property handover.
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SAAS Properties. Embedding Customer Experience Vision through Structured Training Development
SAAS Properties improved customer experience by conducting 4+ training sessions across 9 departments, identifying key CX challenges through 12 stakeholder interviews, and performing 55 CX audits across crucial touchpoints. This initiative empowered employees and aligned CX practices with business goals for sustained growth and customer satisfaction.
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SAAS Properties. Enhancing Operational Efficiency through Process Mapping
SAAS Properties optimized over 40 processes across sales, post-sales, community management, and facility management. Engaging two business teams, the initiative mapped out 700+ tasks to reduce friction points and improve operational efficiency, enhancing both internal workflows and client satisfaction.
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SAAS Properties. Streamlining Complaint Management through an Escalation Strategy
SAAS Properties implemented a escalation strategy to address unresolved customer issues. This approach streamlined the process by defining clear escalation phases, priority levels, and service level agreements (SLAs), resulting in faster resolutions, better communication, and improved customer satisfaction.
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SAAS Properties. Elevating Customer Experience (CX) with an Integrated VOC Strategy
SAAS Properties launched a Voice of Customer (VOC) strategy, capturing key customer and broker feedback through surveys, interviews, and live data tracking. This structured approach provided actionable insights, closing the feedback loop and driving improvements in customer satisfaction and experience.
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SAAS Properties. Elevating Customer Experience (CX) through Touchpoint Analysis and Mystery Audits.
We partnered with SAAS Properties to audit 23 touchpoints and benchmark performance against competitors. The project delivered key insights to enhance communication, service, and digital engagement, boosting customer satisfaction and retention.
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Wasl Properties. Transforming Customer Experience with In-Depth Touchpoint Audits.
Discover how Wasl Properties leveraged a touchpoint analysis and mystery audits across its Residential, Commercial, Freehold, and Lands units to enhance customer interactions, streamline operations, and boost engagement through targeted, actionable recommendations.
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Versace. Elevating CX through Mystery Shopping Audits.
Learn how Versace utilized expert visits and mystery shopping audits to identify pain points in the customer journey and implement targeted recommendations, enhancing store performance and elevating the overall customer experience in franchise-owned locations.
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SODIC. Enhancing Customer Experience (CX) through Site Visits and Mystery Shopping Audits.
Discover how SODIC utilized mystery audits and site visits to identify customer journey pain points and implement actionable recommendations for enhancing the customer experience across its diverse business units.
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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
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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 the sunk cost fallacy in customer experience, it is essential to recognize its potential benefits and ethical considerations. The sunk cost fallacy can enhance customer commitment by encouraging continued investment in a product or service. However, unethical use, such as pushing customers to persist with poor choices, can lead to dissatisfaction and loss of trust. Focus on providing genuine value and clear benefits to ensure customers feel their continued engagement is worthwhile, thus maintaining trust and loyalty.
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