How does the sunk-cost fallacy affect hold times?

August 13, 2018 | Marija Sekularac

The “hold” button is the most hated feature in modern telecommunications technology. Callers get chained to their phones for an eternity while the contact center blazes through the queue. Many companies have trouble managing hold times, even with multiple agents working as fast as humanly possible. Bad elevator music and annoyingly pre-rolls just make things worse.

But something interesting happens during this delay. A survey of US callers discovered the 70% of respondents were willing to wait between 5 to 30 minutes on the phone before they hung up.

Why is that?

Escalation of commitment.

Escalation of commitment is a pattern of behavior where a person continues to commit effort, time and resources to a course of action despite repeated failures. Gamblers continue to play despite losing their money. A business will continue to invest in an underperforming venture in the hope of turning it around.

This behavior is also called a “sunk-cost fallacy.” In business parlance, a sunk cost is money that has already been spent and will not likely be recovered. Phrases like “throwing good money in after the bad” come from the concept of escalation of commitment.

How does this impact your contact center?

Customers don’t like waiting on hold. 60% of callers think that even one minute on hold is too long. But then again, the sunk-cost fallacy prevents them from hanging up and moving on to other things. Woe to the agent whose customer has been on hold for over half an hour.

This persistence also means that your customer queue is going to be packed. If your contact center can’t keep up with the combined new and waiting calls, your queue will just get longer and your team won’t be able to process all of the calls in a timely manner.

What can be done about it?

Call technology companies have tried to address long queue times for decades. Here are some of the most effective software-based solutions so far:

  • Offer a Return call. Certain IVR solutions allow the customer to reserve their place in the queue, then hang up in order to be contacted later. The system then returns their call when an agent is available. This relaxes the customer, as they don’t have to be forced to listen to a holding message for an extended period of time.
  • Call routing software. The more advanced call routing and tracking software solutions let you implement routing logic so that customers can be sent directly to an appropriate agent. Calls are resolved faster and wait times are reduced.
  • Automated response options. Many calls don’t need an agent to assist. Set up an IVR process that directs customers to pre-recorded responses. These options will quickly resolve easy calls and free agents up for more complicated cases.

Escalation of commitment isn’t necessarily a bad thing–it’s just something that happens as the customer is waiting for an agent. But our responsibility is to provide good customer service and reduce the hold times a customer has to endure.