Delighting customers does not build loyalty. Reducing customers’ effort does.
These were the findings from a large customer service survey conducted by the Customer Contact Council (CCC), and featured in the July edition of the Harvard Business Review. The survey’s aim was to get answers to three questions:
- How important is customer service to loyalty?
- Which customer service activities increase loyalty, and which don’t?
- Can companies increase loyalty without raising their customer service operating costs?
After conducting structured interviews with customer service leaders and a study of more than 75,000 customers, the CCC uncovered three findings:
1. Exceeding expectations during service interactions has negligible impact on customer loyalty
Of the 75,000 customers surveyed, they were more interested in how well a company delivers on their most basic and/or vanilla promises rather than being dazzled and having their expectations exceeded. However, 89/100 customer service department heads had ‘to exceed customer expectations’ as their main strategy. This is not new. As I wrote back in June 2007, ‘Exceeding customers’ expectations?’, living by exceeding customers’ expectations doesn’t add up and ends up costing us more in the long term.
2. Service organisations create loyal customers primarily by reducing customer effort
In other words, helping customers solve their problems quickly and easily – not by delighting them in service interactions. Given these findings, we need to reframe around making the customer experience easy.
5 ways to lower the effort and make it easy for customers:
- Don’t just resolve the current issue but head off the next one
- Address the emotional side of customer interactions
- Minimise channel switching by boosting self serve channel stickiness – 57% of complaints came from customer trying to resolve issues online but couldn’t
- Use feedback from unhappy customers to enhance issue resolution rate
- Empower the front line to deliver a low effort customer experience
3. Customer Effort Score (CES) tops the charts with the highest predictive power
In the customer service environment, Customer Satisfaction (CSAT) is a weak predictor of customer loyalty. Net Promoter Score (NPS) is slightly better.
By decreasing customer effort to purchase you can get increases in repurchase, increase spend and willingness to tell others about their experiences.
The survey asked customers to rate how much effort they personally put forward to handle their request. They were asked to rate on a scale of 1 (low effort to purchase) – 5 (high effort to purchase). 94% of participants reporting ‘low effort’ stated their intent to repurchase, 88% stated their intent to increase spend, and 1% stated their intention to speak negatively about the experience. Versus 81% reporting high effort stated their intent to spread negative feedback about the experience.
Outcome: CCC advises that we should move from increasing customer satisfaction to decreasing customer effort.
Remember everybody lives by selling something.
Author: Sue Barrett, www.barrett.com.au